Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Ardrossan Harbour Order Confirmation Bill.

Consideration deferred till To-morrow.

UNEMPLOYMENT BENEFIT.

Mr. W. J. BROWN: I desire to ask the leave of the Rouse to present the following Petition:
To the hon. Members of the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled.
The honourable Petition of the undersigned citizens showeth that if any legislation is passed by law for reduction in the existing scale of Unemployment Benefit or the period for the receipt of benefit serious hardships will be suffered by the vast army of unemployed workers. Wherefore your Petitioners pray that none of the recommendations of the Committee on National Expenditure regarding the unemployed will be put into operation and your Petitioners, as in duty bound, will ever pray.
It bears some 500,000 signatories, and I ask the leave of the House to present the Petition.

Oral Answers to Questions — REPARATIONS AND INTER-ALLIED DEBTS.

Mr. DAY: 2.
asked the Under-Secretary of State for Foreign Affairs whether, having regard to the fact that recovery in world trade is being hampered by the payments of international war debts and reparations, he will consider approaching the various Governments of the other nations concerned with a view to a complete re-examination into the whole international position of this subject?

The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Captain Eden): The hon. Member may rest
assured that the question to which he refers is one that engages the constant attention of His Majesty's Government.

Mr. DAY: Can the hon. and gallant Gentleman say whether any communications, confidential or otherwise, have passed on this subject?

Captain EDEN: I obviously cannot say whether any confidential communications have passed, and, as for the rest, I would remind the bon. Member that it is a matter in which not only His Majesty's Government have it in their power to take the initiative.

Oral Answers to Questions — ROYAL NAVY.

FLAG OFFICERS (TABLE MONEY).

Lieut.-Commander KENWORTHY: 4.
asked the First Lord of the Admiralty whether reductions are to be made in the entertainment allowances of admirals and other flag officers; and, if so, what is the percentage cut proposed?

The FIRST LORD of the ADMIRALTY (Sir Austen Chamberlain): The special reductions to be made in the emoluments of naval officers and men from the 1st October affect basic pay only and not allowances. I may add that table money is granted to flag officers to meet expenses which their duties unavoidably impose upon them and that it is now paid at pre-War rates.

Lieut.-Commander KENWORTHY: Is the right hon. Gentleman aware that this reduction was recommended as far back as the Geddes Committee, and in these times, as an example of economy, could not something be done to cut down certain table allowances?

Sir A. CHAMBERLAIN: That has already been cut down.

Mr. MATHERS: Is the right hon. Gentleman correct in saying that the cut takes place as from the 1st October?

Sir A. CHAMBERLAIN: This has nothing to do with the cut. It is a question about table allowances, and we made a cut long ago, and they are now at pre-War rates.

GIBRALTAR DOCKYARD (WAGES).

Mr. EDMUNDS: 6.
asked the First Lord of the Admiralty if he has considered the communication sent to him
from the Transport and General Workers' Union regarding the proposed reduction in wages of the locally entered workers at His Majesty's dockyard, Gibraltar; and what action he proposes to take in the matter?

Sir A. CHAMBERLAIN: This question deals with the periodical review of rate of bonus in the light of the prevailing cost of living. A reply explaining the circumstances was sent to the union on the 28th instant.

Mr. KELLY: Can the right hon. Gentleman state when the cost of living basis of calculation came into operation for the workers at Gibraltar?

Sir A. CHAMBERLAIN: No, Sir. Not without notice.

Mr. KELLY: Has the right hon. Gentleman any knowledge that it ever applied, and why it is now being applied to those workers at Gibraltar when it had never applied before?

Sir A. CHAMBERLAIN: If the hon. Member wants further information, I shall be grateful if he will put a question down.

PENSIONS.

Sir ROBERT YOUNG: 7.
asked the First Lord of the Admiralty whether the pensions to he paid to men of the Royal Navy who have already served from 12 to 20 years will be based on the new rates of pay or whether adjustments will be made so that pensions will be paid on the basis of the rates of pay paid to them, over the period of their qualifying service for pension?

Sir A. CHAMBERLAIN: The reports received from the committees presided over by the Commanders-in-Chief as well as representations made by Commanders-in-Chief on foreign stations are now under consideration, and I hope to be able to issue a Fleet Order on this subject at a very early date.

Sir R. YOUNG: Are we to understand that this is to apply on the subject of the pension?

Sir A. CHAMBERLAIN: Covering the whole of the matters which we have reviewed as a result of the inquiry.

Captain W. G. HALL: Will the right hon. Gentleman remember that the
police force have been informed that under the new cuts pensions will not be cut, and will he see that the same principle applies to men in the Navy?

Sir A. CHAMBERLAIN: I am not prepared really to make any statement as regards any changes that may be made in orders issued to the Fleet except in the form of a Fleet Order which goes to the Fleet first. Part of the trouble is that the men did not receive in the first instance their information in the proper Service way, and I want to avoid any trouble of that kind in the future. The question of police pensions has not escaped my attention.

SERVICE CONDITIONS (REPRESENTATIONS).

Captain HALL: 8.
asked the First Lord of the Admiralty if he is aware that the regulations lay it down that subjects not approved by the welfare committee may not be brought forward again for six years; and if, as this period is excessive, he will take steps to lessen it to three years?

Sir A. CHAMBERLAIN: The Board propose to consider carefully whether and how far the welfare conferences fulfil the purposes for which they were instituted and what changes (if any) are necessary in the methods open to men of the Royal Navy for making representations as to their service conditions. In this inquiry the effect of the time limit to which the hon. and gallant Member refers will, of course, be included.

PAYMASTER-LIEUTENANTS.

Captain HALL: 9.
asked the First Lord Lord of the Admiralty, if he is aware that the new title of paymaster-lieutenant (W) has recently appeared, and if, as this distinction between ex-cadet officers and those who have risen from the ranks is invidious, he will take steps to abolish it?

Sir A. CHAMBERLAIN: Paymaster-lieutenants (W), paymaster-lieutenants (S) and paymaster-lieutenants (C), who are promoted to these ranks from commissioned writers, commissioned supply officers and commissioned cooks respectively, are not interchangeable, and differ from ex-cadet officers in the scope of the duties they are qualified to perform, the emoluments to which they are entitled and the regulations for their advancement
and retirement. It has therefore been found desirable to distinguish them by an appropriate title. The only other alternative would be to have an entirely separate list.

Captain HALL: Is the right hon. Gentleman aware that, while we quite appreciate that difficulty, there is a great deal of feeling among the men so promoted that it does not tend to help men coming from the lower deck, and, as the Admiralty is about to change the principle with regard to mates, will the right hon. Gentleman consider taking this branch of the Service also into consideration when that is done?

Sir A. CHAMBERLAIN: For the reasons which I stated in my answer, I think those men cannot appear in the general lists without distinctive marks, and it is better that they should appear with those distinctive marks in the Navy List than that separate lists should be kept for them.

INDUSTRIAL EMPLOYÉS (BONUS CUTS).

Captain HALL: 10.
asked the First Lord of the Admiralty whether he is aware that, when the proposed reductions in the bonus of Admiralty workpeople take effect, the remuneration of these Government servants will be less than the rates paid for comparable employment under private firms; and whether, in view of this fact, the proposed cuts will be reconsidered?

Sir R. YOUNG: 11.
asked the First Lord of the Admiralty whether, before deciding upon the proposed reduction in the industrial bonuses of Admiralty workpeople, any steps were taken to ascertain how these Government servants would be affected in comparison with workpeople in similar employment under private firms; and whether he will give instructions that the matter shall be properly discussed by the appropriate joint council before any further action is taken?

Sir A. CHAMBERLAIN: A special meeting of the Shipbuilding Trade Joint Council for Government Departments was held on the 11th September at which the Chairman explained the reasons for the proposed cuts in the industrial bonuses of Admiralty workpeople. In order to give the trade union side of the council
an opportunity of consulting their constituents, the meeting was adjourned till the 22nd. When the meeting was resumed, the trade union side declared that they could not agree to the proposed cuts. Disagreement was registered accordingly and the council was informed that the cuts would be made from 1st October. If the trade union side considered the reductions were inequitable, it was open to them at that time to ask for arbitration but they did not do so. When these reductions take effect, the general level of wage rates in Admiralty industrial establishments will not be lower than in the shipbuilding and engineering industries, and Admiralty work-people will still retain certain privileges which men in these industries do not share, such as the grant of 11 days' leave with pay annually (including public holidays) and the prospect of pensions or gratuities.

Mr. KELLY: By whom has the information been given to the right hon. Gentleman that the wage rates in the Admiralty will be equal to those in outside employment in the shipbuilding trade?

Sir A. CHAMBERLAIN: I derived the information from various sources, including the award of the arbitrator on the last occasion on which the matter went to arbitration.

Mr. KELLY: May I ask the right hon. Gentleman to make further inquiries so that he may inform himself that they will be 3s. per week below the rates paid in outside employment?

Sir A. CHAMBERLAIN: I do not see the necessity for further inquiries, and I cannot accept the hon. Gentleman's statement as to the comparative wages inside and outside Admiralty yards.

Mr. W. J. BROWN: Will the Board of Admiralty reconsider their attitude, especially in regard to the privileges of the staff?

Sir A. CHAMBERLAIN: I do not know whether the hon. Member thinks that it is unfair, when they have 11 days holiday for which they are paid, whilst their brethren outside if they get any holiday are not paid for it.

Mr. KELLY: 12.
asked the First Lord of the Admiralty whether he is aware
that the Shipbuilding Trades Joint Council was called together to consider a reduction of the standard bonus for Admiralty workpeople from 14s. per week to 12s. and appropriate reductions of the industrial bonuses to other Admiralty workpeople; that when the joint council met the trade union side, upon proceeding to discuss the matter, were informed that the meeting had not been called to argue the merits of the proposal but merely to secure the assent of the trade union side; that this assent was refused, and the trade union side were then informed that the proposed cut would operate from the 1st October; and, seeing that these proceedings gave no opportunity for the negotiations promised before effecting this economy, will he have further inquiry made into this matter?

Sir A. CHAMBERLAIN: I cannot accept the hon. Member's account of these discussions and refer him to my reply to the question asked by the hon. Member for Central Portsmouth (Captain Hall).

Mr. KELLY: Having been present at the particular meeting and relating what transpired there, may I ask the right hon. Gentleman if any discretion was given to the officers under his control, so that discussion might take place and the arguments for the trade union side be listened to and an answer given?

Sir A. CHAMBERLAIN: The whole case was discussed and the Admiralty arguments were put forward on the first occasion. The trade union side then asked that they should have an opportunity of consulting their constituents. That was given, and they came back and said that they could not agree, and the disagreement was registered and the usual procedure taken.

Mr. KELLY: Is the right hon. Gentleman aware that his officers stated quite clearly that they had to make a statement and that it had to rest there? No discretion was given.

At the end of Questions—

Mr. KELLY: May I give notice that it is my intention to raise on the Adjournment the question of Admiralty wages in view of the unsatisfactory reply given to-day?

NAVAL BASE, SINGAPORE.

Lieut.-Commander KENWORTHY: 13.
asked the First Lord of the Admiralty whether it is intended to proceed with the construction of the new naval fortified base, dockyard and arsenal at Singapore in view of the financial situation?

Sir A. CHAMBERLAIN: No alteration is contemplated in the decision taken last year to postpone all expenditure upon completing the equipment of the docks and for defence works. In arriving at this decision, which was in accord with the recommendations of the Imperial Conference, full consideration was given to the urgent need for economy.

Lieut.-Commander KENWORTHY: Is the right. hon. Gentleman not aware that the situation to-day is very different from what it was on the last occasion, over a year ago, and are we to go on with this £10,000,000 scheme?

Sir A. CHAMBERLAIN: Yes, I am aware that the situation is worse than it was 12 months ago, but the question of how far you can make economies, and whether any economy would be made by stopping these contracts, was fully considered at that time.

Oral Answers to Questions — NATIONAL FINANCE.

EMPIRE GOLD RESOURCES.

Colonel GRETTON: 15.
asked the Secretary of State for the Colonies whether the Government is investigating the gold resources of the British Empire with a view to their development; and if they have information or reports on any considerable undeveloped gold-bearing formations in West Africa or elsewhere?

The UNDER-SECRETARY of STATE for the COLONIES (Sir Robert Hamilton): The numerous Government geological surveys and departments throughout the Empire are continually engaged in investigations which include gold resources. The Government have no reports for publication.

Mr. MARLEY: Will the research department find out how they manage to bury this gold in Paris and New York, once it has been dug up?

BANK DEPOSITS AND INVESTMENTS.

Mr. GILL: 36.
asked the Chancellor of the Exchequer if he will give the latest available figures as to the amount of money deposited in this country to the credit of foreigners; the amount of deposits by people of this country in foreign countries; and the value of our foreign investments?

The FINANCIAL SECRETARY to the TREASURY (Major Elliot): In reply to the first part of the question, I would refer the hon. Member to the reply which my right hon. Friend gave to the hon. Member for Ilkeston (Mr. G. Oliver) on the 22nd September. As regards the second part, there is no official record of such deposits. As regards the third part, while no official figures are available, there are well-known unofficial estimates such as those in the "Economist" of the 22nd August, 1931.

BANK OF ENGLAND.

Mr. WISE: 38.
asked the Chancellor of the Exchequer whether he is aware that the Bank Charter Act, 1844, and the Currency Act, 1928, require the Bank of England to separate its general banking business from the issue department and to allocate to the Treasury profits less any losses made by the issue department; that the obtaining and disposal of the £50,000,000 credit secured by the Bank of England in July last for exchange purposes was outside the specific functions allowed by the above Acts to the issue department and of the nature of general banking business; and whether, in these circumstances, he will require that the costs and losses arising from this transaction should be met by the Bank of England and not by the taxpayer?

Major ELLIOT: I am, of course, aware of the provisions of the Acts referred to in the first part of the question. I cannot accept the suggestion that the operation was of the nature of general banking business, as it was directly designed to conserve the gold reserves of the country which are concentrated in the issue department of the Bank. In these circumstances any loss or profit arising properly falls to be dealt with in the manner laid down in Section 6 of the Currency and Bank Notes Act, 1928.

Mr. WISE: Can the hon. and gallant Gentleman point to any statutory or legal authority for putting on the issue department functions which are not already accorded to it by Statute, and by that means putting on the taxpayer losses that arise out of a banking transaction?

Major ELLIOT: The hon. Member knows that he is raising this question on the Adjournment to-night. It will be more easily discussed then than by way of question and answer now.

Mr. WISE: May I put another question which is very relevant to the discussion, namely, whether the permission or authority of the Comptroller and Auditor-General, an officer of this House appointed to prevent charges which are not authorised by Statute being put on the taxpayer, has been received, or whether the advice of the Law Officers has been attained?

Major ELLIOT: I really am entitled to ask for notice of a question like that.

LAND VALUATION.

Mr. MACLEAN: 39.
asked the Chancellor of the Exchequer whether he can state the saving which will be effected by his proposed reduction in expenditure on land valuation during its initial stages?

Major ELLIOT: The estimated expenditure of the Inland Revenue Department for the current year in connection with the valuation under Part III of the Finance Act, 1931, was £290,000. It is proposed to reduce this by about £150,000.

Mr. MARJORIBANKS: Would it not be better if this expenditure was completely wiped out?

Mr. ARTHUR MICHAEL SAMUEL: Will it not be complete waste of money to make a valuation of land before the currency is stabilized?

Mr. MACLEAN: Are we to take it then that the Government are going practically to put an end to the entire work of this Department so that taxation cannot be imposed next year?

PARLIAMENTARY DEBATES (OFFICIAL REPORT).

Colonel HOWARD-BURY: 41.
asked the Chancellor of the Exchequer whether he
can state the amount that would be saved in the costs of labour, stationery and printing if the plan was adopted of having a résumé report of Members' speeches instead of a full verbatim report of Members' speeches printed in the OFFICIAL REPORT?

Major ELLIOT: The estimated total annual cost of producing the OFFICIAL REPORT of Parliamentary Debates (House of Commons) is approximately £35,500, of which £28,000 is for paper, printing and binding. It is difficult to estimate the net saving which might result from the adoption of my hon. and gallant Friend's suggestion, in view of the additional cost of preparing résumés of hon. Members' speeches.

Colonel HOWARD-BURY: Would not the mere proposal cause economy by causing a reduction in the expenditure of gas?

Mr. STEPHEN: Could the matter not be dealt with by the hon. and gallant Member who put the question ceasing to make speeches in this House?

ENTERTAINMENTS DUTY.

Mr. JOHNSTON: 42.
asked the Chancellor of the Exchequer whether he is aware that the alterations proposed in the rate of Entertainments Duty involve taxation on 3d. and 6d. charges for admission to entertainments of 33⅓ per cent. and 25 per cent., respectively; that there is no increased tax proposed for the 4s. and other highly-priced charges; and whether, in view of his expressed intention to secure equality of sacrifice, he will consider some rearrangement of the total estimated yield of the tax to lighten the burden on the poorer classes?

Major ELLIOT: I must ask the right hon. Gentleman to await the discussion of the Entertainments Duty proposals on the Committee stage of the Finance Bill when these matters can be debated.

Mr. JOHNSTON: Do the statements of tact incorporated in the question indicate the position as it now is?

Major ELLIOT: As the right hon. Gentleman knows, there are Amendments on the Paper in the name of the Chancellor of the Exchequer dealing with the position.

ECONOMY COMMITTEE (EVIDENCE).

Mr. MACLEAN: 43.
asked the Chancellor of the Exchequer whether it is the intention of the Government to publish the evidence given before the May Committee?

Major ELLIOT: I would refer the hon. Member to the answers which I gave to his supplementary questions on the 14th September.

Mr. MACLEAN: Are we to take it that the evidence which was given before this Committee, which has brought about the change in the circumstances of the country, is not to be published, and that the people are not to know what has led the Committee to put forward their recommendations?

Major ELLIOT: The question was gone into very thoroughly and the hon. Member put a number of supplementary questions upon it, and a very full answer was given.

Mr. MACLEAN: On a point of Order. This particular report has led to a considerable amount of confusion and inquiry in the country. Is it not advisable, if not necessary, that the Government of the day should publish what is, after all, the report of a particular committee?

Mr. SPEAKER: No point of Order arises there.

Mr. MACLEAN: But this was a House of Commons Committee.

INCOME TAX (WHITE PAPER).

Mr. ARNOTT: 44.
asked the Financial Secretary to the Treasury why the final columns of the tables in Command Paper 3954 give the total increase in the taxes now proposed over those of the year 1929–30 and not over those of the year 1930–31?

Major ELLIOT: In considering the sacrifices which various classes of the community are called upon to bear in consequence of the events of the last two years, one must take into account sacrifices imposed in 1930, as well as those which are being imposed in 1931.

Mr. ARNOTT: If the object of publishing this White Paper is to give a clear indication of the extra charges imposed on the various taxpayers by the present
Budget, why is this attempt made to conceal those charges by including charges imposed two years ago?

Major ELLIOT: We have to take into account the two years. We have to take into account the heavy direct taxation imposed previously and not only that which is being imposed this year.

Mr. ARNOTT: Then this does not indicate a sacrifice during the emergency. This is a sacrifice for all time.

Major ELLIOT: No, the emergency surely is an emergency resulting from the trade slump, which began in 1929.

Mr. SHINWELL: There is nothing to conceal, and would the hon. and gallant Member arrange to furnish the House with comparative figures?

Major ELLIOT: There is nothing whatever to conceal, and the hon. Member knows that perfectly well.

Mr. R. A. TAYLOR: Is there any precedent for propaganda by the manipulation of a White Paper?

UNEMPLOYMENT BENEFIT (ADMINISTRATION COST).

Mr. MILLS: 49.
asked the Minister of Labour what economies are proposed in the fees and first-class allowances paid to chairmen of committees, inspectors, and others connected with the administration of unemployment benefit?

The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Mr. Milner Gray): The fees payable to chairmen of Courts of Referees are being reduced by 10 per cent. as from 1st Ocober, 1931. The other members of Courts of Referees and the chairmen and members of local employment committees are unpaid. In all these cases third-class fares only are paid. No change has up to the present been decided upon as regards the allowances for subsistence and loss of wages which may in certain circumstances be claimed. The remuneration of the umpire and deputy-umpires and of the staff of the Department is governed by the general decisions applying to the Civil Service. The only other persons in connection with the administration are the staffs of trade unions and other associations administering arrangements under Section 17 of the Act of 1920.

Oral Answers to Questions — TRANSPORT.

ROAD SCHEME, GLAMORGAN.

Mr. EDWARD WILLIAMS: 16.
asked the Minister of Transport whether he will sanction the construction of the proposed new road from Caerau to Cymmer, Glamorganshire, in order to relieve unemployment in the depressed area, particularly in that the Maesteg Council was instructed to prepare plans for the purpose?

The MINISTER of TRANSPORT (Mr. Pybus): I am not in a position to give a definite decision until I have received the county council's response to the Circular which I caused to be issued to all highway authorities on the 15th September, inviting them to review their commitments in the light of the present situation.

s Mr. WILLIAMS: Will the hon. Gentleman be prepared to receive a joint deputation from the Glamorgan County Council and the Maesteg Council?

BRIDGE SCHEME, CARMARTHEN.

Mr. HOPKIN: 17.
asked the Minister of Transport if the scheme for the high-level bridge at Carmarthen is to be proceeded with; and, if not, what alternative methods does he propose to employ to deal with the traffic problem over the Towy at Carmarthen?

Mr. PYBUS: I am unable to state the position with regard to the scheme for a high level bridge at Carmarthen until I have received from the county council the information asked for in the circular letter addressed to all highway authorities on the 15th September with respect to limitation of expenditure. Traffic will continue to make use of the existing bridge.

ELEPHANT AND CASTLE IMPROVEMENT SCHEME.

Mr. ISAACS: 18.
asked the Minister of Transport if he is yet in a position to announce the decision of the Government upon the Elephant and Castle traffic improvement scheme?

Mr. PYBUS: I am not in a position at present to add anything to the answer which I gave to the hon. Member's question on the 23rd September.

Mr. ISAACS: In view of the uncertainty, will the Minister expedite a decision in the matter?

Mr. PYBUS: I should be glad to do so, but I would say that the total cost of the scheme is £2,000,000, of which three-fourths will have to be devoted to the purchase of the property. That is not a scheme which I should regard with any favour.

Mr. DAY: Can the hon. Gentleman say when he will be able to give any information?

Mr. PYBUS: I have nothing further to add.

TRAFFIO CONTROL SIGNALS, OXFORD STREET.

Major NATHAN: 19.
asked the Minister of Transport whether he has received any reports upon the working of the electric control signals in Oxford Street; and whether he is satisfied that the experiment has proved successful?

Mr. PYBUS: I am satisfied that the experimental system of control of traffic in Oxford Street by means of light signals has proved its usefulness in increasing the flow of traffic and relieving congestion. Observations were taken throughout three days as nearly comparable as possible, the first on a date before the regulations were made, the second after the regulations had been made but before the light signals were working, and the third ten days after the signals came into operation. The observations, though necessarily limited in their scope, showed a progressive improvement. The average speed on journeys taken by the test vehicles in Oxford Street showed an increase of nearly 50 per cent. between the first day and the last, the saving of time being about four minutes on each journey. During the more congested afternoon hours the increase in average speed was no less than 90 per cent. and the saving of time on each journey nearly eight minutes. I have now asked the London Traffic Advisory Committee to consider and report upon the representations which have been received with regard to the regulations.

Major NATHAN: Does the hon. Gentleman propose to apply the same procedure to other congested areas in London?

Mr. PYBUS: It is proposed to recommend those areas to look into the matter and decide whether they will adopt it or not.

Major COHEN: Has it been found possible to dispense with the services of any of the police on point duty?

Mr. PYBUS: I should require notice of that question.

RUNNYMEDE (ROAD SCHEME).

Mr. EDE: 20.
asked the Minister of Transport if he proposes to withdraw the grant indicated to the Surrey County Council for the work at Egham connected with the construction of a by-pass road and the preservation of Runnymede by the National Trust as a place of historic interest?

Mr. PYBUS: I have recently received the Surrey County Council's proposals for the curtailment of road expenditure in their area, which includes the Egham By-pass Road. Until I have considered these proposals, in conjunction with those of the other highway authorities, I cannot say how far it may be possible to proceed with this or other particular schemes at the present time.

Mr. EDE: Will the Government, having deprived us of our liberties, enable us to preserve the places where some of them were born?

OCEAN ROAD, SOUTH SHIELDS.

Mr. EDE: 21.
asked the Minister of Transport what grant he proposes to make towards the scheme for the widening of Ocean Road, South Shields?

Mr. PYBUS: An offer of a grant of 60 per cent. of the estimated cost of widening Ocean Road, South Shields, was made in May last. The town council decided not to proceed with the scheme on this basis, and the offer was accordingly withdrawn.

Mr. EDE: In view of the increasing amount of unemployment in the borough, will the hon. Member consider a further application for an increased grant?

Mr. PYBUS: I think it would be better if the application were made first.

DARTFORD-PURFLEET TUNNEL.

Mr. MILLS: 22.
asked the Minister of Transport if he can now state the decision regarding the proposed Dartford-Purfleet tunnel; and whether, if alterna-
tive suggestions are to be considered, he will consider a high-level bridge, such as the Tyne or Forth Bridge?

Mr. PYBUS: As I explained in the course of the Debate on the Economy Bill on the 28th September, it has been decided, after consultation with representatives of the county councils of Essex and Kent, to postpone the construction of the Lower Thames Tunnel. I hope, however, to arrange with these local authorities for all necessary measures to be taken for safeguarding the line of the tunnel and its approaches. No question arises of considering alternative suggestions.

Mr. PALMER: Is this an indication of a slowing-down policy, with regard to necessary works?

Mr. HOFFMAN: Is the hon. Gentleman aware that this tunnel was agreed to in 1924—seven years ago?

Oral Answers to Questions — EDUCATION (SOUND FILMS).

Mr. DAY: 23.
asked the President of the Board of Education whether the experiments made for the use of sound films for educational purposes have proved satisfactory; and does the Government propose to extend these facilities?

The PARLIAMENTARY SECRETARY to the BOARD of EDUCATION (Sir Kingsley Wood): I understand that no report has yet been issued by the bodies responsible for the experiments to which the hon. Member refers, No special Government facilities are necessary for the making of experiments of this nature.

Mr. DAY: Can the right hon. Gentleman say whether any grant has been made for this purpose?

Sir K. WOOD: Not so far as I am aware. The experiments have been carried out independently of the Government.

Viscountess ASTOR: In considering the question of films, will the right hon. Gentleman consider the censorship of films shown to children?

Sir K. WOOD: That raises a much larger question.

Oral Answers to Questions — BRITISH ARMY (RESERVISTS).

Mr. MARLEY: 24.
asked the Financial Secretary to the War Office in what cir-
cumstances and under what regulations a soldier, who on the completion of his service has been placed upon the Reserve, may be removed from the Reserve strength before the expiration of his contract time?

The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Duff Cooper): I will send the hon. Member a copy of the relevant extract from the King's Regulations for the Army and the Army Reserve which states the various circumstances in which a reservist may be discharged from the Army Reserve before the expiration of his engagement.

Mr. MARLEY: Is it possible for the War Office to break contracts except it is a case of crime or law breaking?

Mr. COOPER: It is not a question of breaking a contract. The service can be terminated for various reasons; for bad conduct, or if it is in the general interest of the parties concerned.

Mr. MARLEY: Are all recruits furnished with the terms upon which their reserve service may be ended?

Mr. COOPER: They are available for recruits.

Oral Answers to Questions — COAL INDUSTRY.

KERESLEY COLLIERY (RELIEF DEPUTY).

Mr. FRANK SMITH: 26.
asked the Secretary for Mines whether the circumstances connected with the dismissal of Mr. Llewellyn Jones, of Collycroft, Bedworth, Warwickshire, a relief deputy at the Keresley Colliery, have been brought to his notice; and whether, in view of the importance of carrying out all the regulations of the Mines Act in the interests of the safety of the men employed, he will cause an inquiry to he made into all the circumstances of the case?

The SECRETARY for MINES (Mr. Foot): I am making detailed inquiries and will communicate the result to the hon. Member as soon as possible.

Mr. SMITH: In view of the fact that a serious accident has occurred in this area since, will the hon. Member see that the investigation is very thorough?

Mr. FOOT: I can promise that the investigation will be thorough. There
are certain points which I have not yet been able to cover, but I hope the investigation will be completed in a day or two.

OIL EXTRACTION.

Mr. GEORGE HARDIE: 31.
asked the Lord President of the Council whether, in regard to the extraction of oil from coal, the work proposed to be carried out is to be upon a laboratory or a commercial scale; and can he say what systems have been chosen?

The LORD PRESIDENT of the COUNCIL (Mr. Stanley Baldwin): I presume the hon. Member refers to the extension of work at the Fuel Research Station, East Greenwich, first announced in this House by the hon. Member for Linlithgow (Mr. Shinwell) on the 5th May last. As then stated the proposal is to develop laboratory scale experiments already made to "a small commercial scale to cover the hydrogenation, cracking and refining of tar oils." I would suggest that, as technical questions are involved which are not easily dealt with by way of question and answer, the hon. Member, or any other hon. Member wishing to have further information on this subject, should apply

The following statement shows the number and net tonnage of Mercantile vessels launched in the United Kingdom during the year:


—
Sailing.
Steam.
Motor.


Vessels.
Tons net.
Vessels.
Tons net.
Vessels.
Tons net.


Built for British owners
…
232
18,685
285
314,065
259
212,261


Built for Foreigners
…
12
4,865
74
85,613
84
244,406


Total
…
244
23,550
359
399,678
343
456,667

Oral Answers to Questions — NATIONAL HEALTH INSURANCE.

Mr. STEPHEN: 29.
asked the Minister of Health what are the conditions which determine whether a panel practitioner under the National Health Insurance Act is entitled to receive a grant from the necessitous fund?

The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Mr. E. D. Simon): Grants from the special expenses portion of the mileage funds in England and Wales, to which I assume

to the Secretary of the Department of Scientific and Industrial Research, or to the Director of Fuel Research, who will give the fullest possible information.

Mr. HARDIE: The right hon. Gentleman has not answered my question. I want to know the intentions of the Government.

Mr. BALDWIN: The intentions of the Government are the same as those expressed in a reply given some time ago.

Oral Answers to Questions — SHIPBUILDING INDUSTRY.

Mr. MACLEAN: 27.
asked the President of the Board of Trade the total numbers, respectively, of the sailing, steam and motor vessels built in the United Kingdom during the year 1930; the net tonnage in each of the three categories; and whether he can state separately the number built for foreign owners?

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Major Lloyd George): As the answer contains a table of figures I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

Following is the answer:

that the hon. Member refers, are made when requisite to enable insurance doctors practising in sparsely populated areas to provide improved service for the benefit, of their insured patients.

Mr. STEPHEN: When there are two or three doctors in a sparsely populated district, can the hon. Member say whether this sum is divided between them, or whether one is given any preference over the others?

Mr. SIMON: Special conditions are in operation in these areas.

Mr. STEPHEN: 30.
asked the Minister of Health if he will consider reducing expenditure by abolishing or reducing the regional medical office department under the National Health Insurance Acts and allow panel practitioners to determine whether their patients are fit for work or otherwise without interference from an outside department?

Mr. SIMON: The provision of a second medical opinion in cases of doubt whether an insured patient is incapable of work has been recognised as desirable since sickness benefit first came into operation, and my right hon. Friend cannot undertake to consider the hon. Member's suggestion with favour.

Mr. STEPHEN: In view of the need for economy at the present time and the fact that this board is only used to deprive applicants of benefit—it never decides in their favour—will the Government trust the ordinary medical practitioners to determine these cases?

Mr. SIMON: It is almost the unanimous opinion of those concerned with the work of this board that the present practice should continue, and in all the circumstances of the case I cannot accept the hon. Member's suggestion.

Mr. STEPHEN: Is the hon. Member aware that nearly all medical practitioners resent this inspectorate? Can he say what is his authority for saying that there is an almost unanimous opinion in favour of it?

Mr. SIMON: My information is entirely different from that of the hon. Member. No complaint whatever has been received.

Oral Answers to Questions — POST OFFICE.

LETTER DELIVERIES, ROCHDALE.

Mr. KELLY: 32.
asked the Postmaster-General why the first delivery of letters each morning in the Turf Hill area of Rochdale is not completed before nine o'clock?

The ASSISTANT POSTMASTERGENERAL (Mr. Graham White): I am having inquiry made and will write to the hon. Member.

TELEGRAMS.

Mr. CECIL WILSON: 33.
asked the Postmaster-General whether, as in the
year 1929–30 the income from Press telegrams fell short of the expenditure by £207,000, any steps are to be taken to reduce this loss in future?

Mr. WHITE: Extensive changes in methods and equipment now in progress will, I hope, assist in a reduction of the general loss on the telegraph service, including that on Press telegrams. If the hon. Member has in mind the question of an increase of the Press telegraph tariff, no proposals in this direction are under consideration at the moment. Any such change would require legislation.

Oral Answers to Questions — BEET-SUGAR INDUSTRY.

Lieut.-Commander KENWORTHY: 34.
asked the Minister of Agriculture what are the Government's intentions regarding the beet-sugar industry?

The MINISTER of AGRICULTURE (Sir John Gilmour): The Government has no intention of amending the British Sugar (Subsidy) Act, 1925, or the British Sugar Industry (Assistance) Act, 1931.

Lieut.-Commander KENWORTHY: Has the right hon. Gentleman consulted the Home Secretary on his answer?

Sir J. GILMOUR: No, Sir.

Oral Answers to Questions — "DAILY WORKER" NEWSPAPER.

Mr. W. J. BROWN: 35.
asked the Secretary of State for the Home Department if he can make any statement as to the circumstances in which, on Friday, 25th September, police officers occupied, without a search warrant, the premises of the "Daily Worker" and the Utopia Press, and exercised a censorship of the matter to appear in the issue of the following day, Saturday, 26th September?

The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Mr. Oliver Stanley): No question of censorship by police officers arises. The matter has culminated in criminal proceedings, and the hon. Member will appreciate that it would be improper to make any statement while the case is before the court.

Mr. BROWN: Quite apart from the individual prosecution, with which I am not concerned in the slightest, I desire to ask whether it is not a fact that for
a period of approximately one hour the police confined the staff of this newspaper within a given room, and did, in fact, exercise a rigorous censorship over the contents of the following day's paper? Under what Government powers was that action taken?

Mr. STANLEY: I can only repeat that it would be improper for me to make any statement with regard to this particular case. The hon. Member knows as well as I do the steps that are open to any hon. Member if he considers that the police exceed their duty.

Commander OLIVER LOCKER-LAMPSON: Who pays for the "Daily Worker"?

Mr. BROWN: rose
—

Mr. SPEAKER: It is very unusual to put a supplementary question when an answer of that kind has been given.

Mr. BROWN: On a point of Order. The question and the supplementary question addressed to the conduct of the police on one matter has been answered by reference to the prosecution of an individual, with which I am not in the least concerned. I submit, with great respect, that this House is the custodian of the liberties of the Press, among other things, and I wish to ask what is there in the circumstances that an individual is being prosecuted which prevents a reply to the question on the Paper?

Mr. SPEAKER: The Minister has stated that the ease in question is sub judice.

Mr. BROWN: Further to that point of Order. May I submit that what is sub judice—[Interruption.]

Mr. MACLEAN: This is a greyhound racing track and the kennels are over on the other side.

Mr. BROWN: What is sub judice—

Mr. SPEAKER: I cannot see how any point of Order arises. I can only give the hon. Member advice on the matter.

Mr. BROWN: With very great respect, I understand that what is sub judice, at the present time—[Interruption.]

Mr. SPEAKER: It is not a point of Order.

Mr. BROWN: Am I not to be entitled to submit my point of Order? Is a legitimate point of Order to be denied expression because of disorder on the other side of the House?

Mr. SPEAKER: With regard to that, I am not influenced by either side of the House.

Mr. BROWN: In those circumstances, may I submit my point?

Mr. SPEAKER: If ally genuine point of Order is submitted to me, I am always willing to hear it and consider it.

Mr. BROWN: So we always understand. I have put a question relating to the conduct of the police in certain circumstances. I have had a reply that the action of a given individual is now before the courts. I desire to say to you that it is no answer to a question about the conduct of the police to refer to an individual case which is sub judice in the courts. The two things are quite separate and distinct, and I can see no reason why I should not have a reply to my question.

Mr. SPEAKER: That is really not a, point of Order. I am not responsible for the answers given. If hon. Members are not satisfied with the answers, it is no fault of mine.

Mr. JOHNSTON: Arising out of the original answer, do the executive claim any right whatever of censorship over matter which may appear in the Press of this country?

Mr. STANLEY: The first part of the original reply which I gave indicated quite clearly that the executive, the police, do not exercise the practice of censorship over the Press.

Mr. MACQUISTEN: Is there no way in which we can protect ourselves against Members getting up and audaciously raising points of Order which are not points of Order?

Mr. SPEAKER: I am quite capable of dealing with those matters.

Oral Answers to Questions — FOOD PRICES.

Mr. STEPHEN: 46.
asked the Prime Minister whether the Government intend to take further powers before the close of the Session to deal with the situation
arising from the rise of prices resulting from the departure from the Gold Standard?

The PRIME MINISTER (Mr. Ramsay MacDonald): I would ask the hon. Member to await the statement which I shall be making on Business at the end of Questions.

Oral Answers to Questions — PUBLIC BUILDINGS (FLOOD LIGHTING).

Mr. MARLEY: 47.
asked the Financial Secretary to the Treasury whether any expense will fall upon the Treasury in connection with the flood-lighting of public buildings, either in respect of equipment or supplies of current?

Major ELLIOT: I would refer the hon. Member to my reply of the 15th September to my hon. and gallant Friend the Member for West Dorset (Major Colfox).

Mr. MARLEY: Will the hon. and gallant Gentleman take particular care that the cost of the current supplied does not come on to the ordinary charges for the maintenance of public buildings?

Major ELLIOT: The reply which was given previously on this point is still accurate, namely, that no part of the expenditure will fall upon the Exchequer.

Mr. MARLEY: Will the hon. and gallant Gentleman take into consideration the suggestion in my supplementary question. Have separate meters been put in for measuring the current for this lighting; and will he see that nothing of the cost will come upon the Exchequer in a roundabout manner?

Major ELLIOT: I shall certainly take note of that suggestion.

Oral Answers to Questions — WAGES AND COST OF LIVING.

Mr. DAY: 48.
asked the Minister of Labour whether he can state the information in the hands of his Department with reference to the present rates of money wages as compared with the average level cost of living of the working-class population?

Mr. GRAY: At 1st September, 1931, the average level of working-class cost of living, as indicated by the statistics compiled by the Ministry of Labour, was approximately 45 per cent. above the level
of July, 1914. As regards rates of wages, the information in my possession is insufficient to provide a basis for precise calculations, but it is estimated, from such particulars as are available, that for workpeople of corresponding grades weekly full time rates of wages are about 70 per cent. on average, above the level of July, 1914.

Mr. DAY: Can the hon. Gentleman say whether, in these computations, rent was taken into consideration?

Mr. GRAY: Yes, Sir, rent is taken into consideration. It is quite the normal calculation according to the methods adopted in arriving at the cost-of-living figure.

Mr. DAY: Will the hon. Gentleman then say how he gets a figure of 45?

Mr. RICHARDSON: Is the hon. Gentleman not aware that at least 33 per cent. of the miners in Durham are not 20 per cent. above the datum line?

Mr. MARLEY: Is this estimated rent on a comparable basis with the £700 allowed in lieu of residence to the Serjeant-at-Arms?

Oral Answers to Questions — CHINA (BRITISH SUBJECTS, HANKOW).

Sir CHARLES CAYZER: 1.
asked the Under-Secretary of State for Foreign Affairs if he has considered the petition sent by the British subjects at Hankow with respect to the recent outrage on British subjects; and what answer has been sent?

Captain EDEN: The petition referred to has not yet been received. The second part of the question does not, therefore, arise.

Oral Answers to Questions — LIMITED LIABILITY COMPANIES (BONUS SHAMS).

Mr. WISE: 28.
asked the President of the Board of Trade whether information is available as to the extent to which the nominal capital of limited companies subject to Income Tax has been increased since the War by the issue of bonus shares; what percentage relation this figure bears to the total nominal share capital of such companies; and what is the average rate of interest paid on such bonus shares?

Major LLOYD GEORGE: I regret that the information is not available.

Mr. WISE: Cannot the information be secured by the hon. Gentleman's Department from the Revenue Department?

Major LLOYD GEORGE: In view of the fact that there are nearly 100,000 of these limited companies, I do not think that the labour and expense involved would be justified.

BUSINESS OF THE HOUSE.

Mr. ARTHUR HENDERSON: May I ask the Prime Minister whether he has any statement to make with regard to business; and also when he hopes to bring this part of the Session to an end?

The PRIME MINISTER: The National Economy Bill has passed this House, and by the end of the present week we hope to obtain the Finance Bill and the necessary Supplementary Estimates. The only business in view at the moment which will then remain to be disposed of before this Session can be brought to an end, is the Consolidated Fund (Appropriation) Bill and the Sunday Performances (Temporary Regulation) Bill. It would appear quite feasible for this business to be concluded by Wednesday next. The programme then would be:
Monday, 5th October: Sunday Performances Bill, Second Reading.
Tuesday, 6th October: Sunday Performances Bill, Committee and Third Reading; and the Consolidated Fund (Appropriation) Bill, Second Reading.
Wednesday, 7th October: Consolidated Fund (Appropriation) Bill, remaining stages.
There will also be a short Bill to deal with the possibility of exploitation of the public in articles of food of general consumption. I feel that this will meet with general approval and will not require much Parliamentary time. If any additional business is necessary, an announcement will be made later.

Mr. HENDERSON: May I ask two questions? First, when is the Bill for dealing with food prices likely to be available to Members Secondly, is it hoped that the House will adjourn on Wednesday or prorogue?

The PRIME MINISTER: The House will certainly adjourn on Wednesday according to our expectation. If there is any additional business, we think it can be worked in for Wednesday. With reference to the Food Prices Bill we hope that it will be circulated to-morrow. I might also say that the Sunday Performances Bill has been circulated to Members.

Mr. HENDERSON: May I ask the Prime Minister whether, if we adjourn on Wednesday, he can give the House any idea as to when the House will resume?

The PRIME MINISTER: I think that, if the question that is usual at the end of the Session is put to me on that subject on Wednesday, I shall be able to inform the House. I find that the Bill dealing with food prices will be available to-morrow evening.

Mr. HOFFMAN: May I ask when it is proposed to take the Expiring Laws Continuance Bill?

The PRIME MINISTER: That will be later on.

Mr. STEPHEN: Can the right hon. Gentleman say whether there is to be provision in the Bill indicated in connection with prices for dealing with the question of rent, in view of the fact that rent is so heavy a burden upon the unemployed workers?

The PRIME MINISTER: We are dealing with food in this Bill, but that is certainly under observation.

Mr. KIRKWOOD: I would like to ask the Prime Minister if he will not relieve the House by telling us if there is going to be a General Election?

The PRIME MINISTER: I was really under the impression that the way that I answered my right hon. Friend's question greatly relieved the House.

Mr. G. HARDIE: In view of what has taken place by legislation in this last week, and of the intense suffering that will be caused by the cuts in unemployment pay, has the Prime Minister seen his way to become once more human and take back these cuts on the unemployed?

LONDON ELECTRIC, METROPOLI- TAN DISTRICT, AND CENTRAL LONDON RAILWAY COMPANIES (WORKS) BILL [Lords].

Reported, with Amendments; Report to lie upon the Table, and to be printed.

MESSAGE FROM THE LORDS.

That they have agreed to,—

Public Works Loans Bill,

National Economy Bill, without Amendment.

—
1st July, 1926, to 30th June, 1927.
1st July, 1927, to 30th June, 1928.
1st July, 1928, to 30th June, 1929.
1st July, 1929, to 30th June, 1930.
1st July, 1930, to 30th June, 1931.


(1) Number of persons who have enlisted in the Army.
28,809
29,280
29,635
25,647
33,963


(2) Numbers who were released on compassionate grounds:—(a)







Discharged
484
471
549
631
512


Transferred to Army Reserve
530
510
343
429
272


Total
1,014
981
892
1,060
784


(3) Numbers released on purchase within three months of enlistment (b).
449
384
367
350
415


NOTE.—(a)During the whole year. No records are available as to the length of colour service performed before release.


(b)Records are only available for purchase within three months of enlistment, the period within which a recruit has a statutory right to purchase his discharge.

NATIONAL FINANCE.

GOLD STANDARD.

Mr. MANDER: asked the Chancellor of the Exchequer if it is the intention of the Government to fix the currency on a new Gold Standard at an early date?

Major ELLIOT: I would refer the hon. Member to the reply which my right hon. Friend gave to the hon. Member for Plaistow (Mr. W. Thorne) on Monday last.

TREASURY BILLS.

Colonel WEDGWOOD: asked the Chancellor of the Exchequer whether he will explain the item "British Government loan to France, £20,165,000," among the receipts in the Treasury Account up to 19th September?

Orders of the Day — FINANCE (No. 2) BILL.

Considered in Committee.

[1ST ALLOTTED DAY.]

[Sir DENNIS HERBERT in the Chair.]

CLAUSE 1.—(Increased duties and draw- backs on certain descriptions of beer.)

Sir WILLIAM WAYLAND: I beg to move, in page 2, line 14, to leave out "£6 14s.," and to insert instead thereof "£5 18s. 6d."
In effect this means that the extra Beer Duty as suggested is halved, and instead of an extra penny a pint, it will be an extra halfpenny a pint. I have no wish to disturb the equilibrium of the Budget, but we have all been talking about equality of sacrifice—[Interruption.]

The CHAIRMAN: I think that hon. Members who wish to finish their conversation would do better to leave the House.

Sir W. WAYLAND: We have all been talking about equality of sacrifice, but with this extra duty I can only see a gross inequality. The duty, if this Bill is passed, will be lb times greater than it was in 1914, and we object to the fact that there has been no relief to the Beer Duty for many years, but only additions to the heavy burden now borne by a very large proportion of the working classes of this country. One can only suppose that Chancellors of the Exchequer are actuated, not only by the desire to obtain extra revenue, but by a feeling of wishing to victimise the beer drinkers. I do not remember, and I may be wrong, but not to my knowledge has a single Chancellor of the Exchequer since 1918 been a beer drinker. I believe there have been those who have been whiskey drinkers, port wine drinkers, and champagne drinkers, hut no beer drinkers, and not being beer drinkers themselves, they have had no hesitation in penalising all those who drink the national beverage. I cannot help thinking, therefore, that the beer drinker has been sacrificed on the altar of teetotalism.
What are the present conditions of beer drinking as compared with pre-War? In 1914 convictions for drunkenness were
183,828. In 1929 they had dropped to 51,966, which are the last figures I could obtain. The consumption of beer during that time had dropped from 31,000,000 barrels to 19,000,000 barrels, which means that the consumption of beer from 1914 to 1930 had dropped by nearly a half. That proves that we can really consider this country to be a nation of very moderate drinkers. What does the teetotaller do in the way of equality of sacrifice? What burden does he bear? Precious little. If a man with an income of £400 a year has three children and does not consume alcoholic drink and does not smoke, he pays no taxation at all. That is not fair. It is absolutely unfair, and yet every Chancellor takes the first opportunity of planking another burden upon the poor consumer of the national beverage.
The Chancellor expects that he will get £10,000,000 out of this extra impost next year. I offer to bet him five to one that he does not get anything like that. Since the tax was imposed, I am informed, the sales have dropped considerably, and they are likely to drop. How can you expect the man in the street with an ordinary wage, especially in the country districts, to be able to indulge in even one and a-half pints of beer a day at the price which he has to pay for it at the present time? I have the honour to represent a constituency where a large quantity of hops is grown, and I am informed by the hop growers, who are farmers, that, in view of the fact that the consumption of beer is bound to fall, it is their intention to grub up a large quantity of land which is being cultivated for hops, and in consequence to discharge a large number of their employés. In the hop fields more labour is employed to the acre than in any other crop. The agricultural labourer gets a low rate of wages compared with other workers. The average throughout Kent is 32s. for the ordinary agricultural labourer, who consumes, say, one and a-half pints of beer per day. That means 68 gallons per annum, and he will pay in beer taxation £13 12s. a year, or 5s. 2d. per week. It will be agreed that that is not fair to him or to any other beer drinker. The agricultural labourer, like every other worker, has a right to be able to indulge in his favourite refreshment without being penalised to such an extent.
I believe that the Chancellor could have found other means of obtaining the necessary money. He has stated that it is not his intention to tax either tea or sugar. I would remind him that there is a difference between necessities and necessaries. Neither tea nor beer are necesssities. Sugar may perhaps be termed a necessity, but the other two articles certainly are not. To single out beer for heavy taxation and leave tea alone cannot possibly be fair. It may be said that beer causes drunkenness and the wreckage of many homes and the Noble Lady the Member for the Sutton Division of Plymouth (Viscountess Astor) will base her arguments on that foundation; but it will be admitted that the wreckage of women's nerves to-day is in a great measure due to the excessive consumption of their favourite beverage, tea. Who would have felt the imposition of one penny a pound on the present price of tea, which is sold at such a low figure that, taking the average consumption for a household at one and a half or two lbs. a week, it would have meant no more than twopence per week extra. Let us take the housewife's position. She would have to bear twopence extra a week. Her husband is a beer drinker, and in many cases he will say to her: "Well, mother, I am giving you 25s. a week to keep the House, or 30s. or 40s. Now I have to pay a penny a pint more for my beer, and as I consume three pints a day, I am afraid that I shall have to deduct 1s. 9d. a week from your housekeeping money." If he did that, the housewife would be far worse off than if a penny had been placed on tea; she would have paid that extra impost and would not have felt it.
I cannot see why the Chancellor should not tax those millions of bottles of foreign mineral waters which come into this country every year. A million bottles a week come from France; we import a large quantity from Germany, and considerable quantities from Belgium and Austria. Taking them altogether, I do not think that I under-estimate the quantity when I say that probably 8,000,000 bottles a month are consumed in this country. They are consumed, not by the working classes, but by people with fair incomes and large incomes. Therefore, we could easily have placed a tax of 3d. a bottle on these foreign minerals
and spa waters. We should not only derive from that source a large amount of money, but give a chance to those who like Harrogate water or other water, and so give our own spas a chance of selling considerably more water than they are able to do to-day. The taxation of beer is a gross inequality, and it places a heavy and undue burden upon the working classes, and especially the class which I represent, the agricultural labourer.

4.0 p.m.

Mr. HASLAM: I beg to support the Amendment, and I do so mainly in the interest of the lower-paid workers of this country, more particularly the agricultural workers. This is not the first time on which I have drawn attention to the gross inequality of sacrifice that is imposed upon the lower-paid workers by this particular tax. This tax is hallowed by tradition. It has come down to us decade after decade, even generation after generation, as the best way of causing the working-class people to bear their fair share of the taxes of the country. While in the case of the Income Tax payer the burden is being adjusted so that those with larger incomes pay mare and those with smaller incomes pay less, and that adjustment has been pursued year by year until it has now arrived at an extremely complicated system with a view of charging each person according to his means, yet when we come to the taxation of the working class, no attempt at grading whatever has been made.
The agricultural worker with a wage, say, of 28s. or 30s. a week, even if he limits his consumption of beer to one pint a day, is a far more heavily taxed man than the worker in the town who, perhaps, has £3, £4, or £5 a week. [An HON. MEMBER: "When he gets it!"] There are workers earning that wage. The agricultural worker is taxed on exactly the same level; he is simply taxed on the amount of beer that he consumes, and while the Chancellor has endeavoured to pursue the principle of adjusting the Income Tax to the broadest backs, the only principle he seems to pursue in the taxation of the working man is to adjust the tax to the largest consumer. I have called attention to this injustice on many occasions in this House, both when Chancellors of a Conservative complexion have introduced
Budgets, and when my right hon. Friend introduced his Budget on these lines in previous years, and I do say, for that particular reason, there is no attempt whatever, as the hon. Mover has pointed out, at equality of sacrifice.
I would like to address one or two words to those who support this tax on temperance principles. Beer, of course, does contain alcohol to an extent, perhaps, of 4 per cent. or perhaps 3 per cent. in the case with which I am more particularly concerned, the kind of beer which the agricultural labourer drinks, and I would point out to those who believe that alcohol is a bad thing, and who believe that consumers of alcohol should bear a heavy tax because they consume it, and with the object of reducing it, that beer is more heavily taxed in relation to its content of alcohol than either wines or spirits. I believe that it was the case in Scotland, somewhere about 100 years ago, owing to the very heavy tax placed on beer, that that liquid was replaced to a great extent by spirits, and. I believe that if we continue in this House to place this very heavy tax on the beer which is consumed by the people of this country, we run the danger of replacing that harmless beverage by beverages which are obviously deleterious to health. The figures by which one can compare the amount of alcohol in the various liquids—spirits, wines and beers—are somewhat complicated, and it is not easy, perhaps, to arrive at an exact measure of the amount of tax which alcohol bears. But I have endeavoured to work out, in a simple form, these figures which, I hope and believe, are accurate, and which I will venture to put before the Committee. In the case of beer, if we take a unit degree of alcohol, the tax is 7d. The tax on wines, including a certain beverage known as "red biddy," which is a rough wine, to which has been added raw alcohol to the utmost extent which the law allows, so as to permit it to come in at the lowest possible rate of taxation, is only 5d. Therefore, a man who wants to get alcohol, and alcohol only, alcohol in the crudest form, alcohol, as it is "with a kick in it," that is to say alcohol which is intoxicating to a greater degree, if he expends 5d., he can get the same amount of alcohol as he would if he spent 7d. on beer.

Mr. LEIF JONES: May I ask what percentage of alcohol in beer the hon. Member is allowing in his calculations?

Mr. HASLAM: At the moment I am afraid I have not got the basis of the figures which I gave to the Committee. I have them in the Lobby, and will be very pleased to go into them with the right hon. Member afterwards. I said just now that the tax per unit degree of alcohol in beer is 7d. and on wine, including such wine as "red biddy," is 5d. The amount of tax on whisky is 1s. 3d. That, of course, is a higher tax on that particular form of alcohol, but every Member of the Committee knows that the kind of alcohol which is put into Imperial whisky and spirit is far less deleterious to health than the raw alcohol in the immature wine which is coming into this country in ever increasing quantities and at a very low rate of tax. I desire those of us who look at this matter from a temperance point of view to consider those figures, and to consider whether it is wise to place this enormous duty on beer, and the comparatively less duty on forms of spirit which can be obtained, and which are far more harmful, and whether they are not forfeiting their temperance notions. I also appeal to a larger circle, namely, those who are interested in the health of the nation, in an endeavour to get their support for the principles I am endeavouring to put forward. Surely beer is a far, far healthier liquid than anything in the shape of "red biddy," or the deleterious stuff which is pouring into the country at a comparatively low rate of duty.
In asking the agricultural worker to make this sacrifice, we are also asking him to give up what is an important amenity in his life. In spite of the movement which has been going on for the last 10 or 15 years to make our villages More bright and cheerful, to give the agricultural worker the chance of meeting and informing himself of what is going on, the number of village institutes is still somewhat limited, and in the great majority of villages, at any rate in the Eastern counties, there is only one club, only one place of meeting, and that is the village inn. I would also point out that the village inn is not that scene of brawling drunkenness which some temperance advocates be-
lieve it to be. The village inn very often contains a bagatelle board and other means of recreation, and may contain a piano, not perhaps strictly of the most up-to-date kind, and even if it does not, the local vocalist, trained in the church or chapel choir, is willing to oblige with a song. The village inn is not a place where it is simply the business of the innkeeper to sell as much alcohol as he can to each individual customer. His customers have not got the money. They are limited by the very small wage they have, and, therefore, it cannot be run as a mere shop in which alcohol is let out in a stream, as, unfortunately, may be the case in urban districts.
Therefore, I say that in depriving, as we are going to deprive, the agricultural worker of his pint—I limit it to one pint, and if that is the case, he will have to cut it out—he will also be deprived of all those humble amenities which he has hitherto enjoyed. I say that that is a gross injustice. I say that some attempt should be made to equalise the burden of taxation on those who consume beers, wines and spirits. No such attempt has been made. It has all been put on to beer, and that is a great injustice to the lowest paid of our workers, those to whom the country will look to produce more food in order to save the people from starvation if this country should be called upon, as it may be in the not distant future, to face privation and even worse.

Viscountess ASTOR: It is always very interesting to hear the point of view of various hon. Members about drink, because the drink question is not a party question at all. Every party has its wet spots and its dry spots. Sometimes the plea is made for the agricultural workers, but whoever they are speaking for they always take the point of view that we are depriving the workers of something that they want. I admit that there is a great deal of truth in that argument, but today we have to consider drink from the national point of view, and not the narrow drink point of view. We are spending now £277,500,000 a year on drink.

Sir W. WAYLAND: How much of that goes in taxation?

Viscountess ASTOR: I will deal with the hon. Member in a moment. He would not let me interrupt him, and I did not, although I did try to. The hon. Member for Horncastle (Mr. Haslam) said that sooner or later this country may go short of food. In that situation we have to consider whether it is wise to spend so much on drink when the workers of the country really may be going short of food. The same hon. Member drew a very pretty picture of the village inn, and if most of the village inns were not tied houses I would agree that they would not be—at least a menace to the community. All who know anything about drink know that.

Mr. DUNCAN: What do you know about drink?

Viscountess ASTOR: As long as the village inn is a tied house the innkeeper must push his wares or get out. If he were free, or even under Government control, it would be a different thing, but as long as innkeepers are tied to the brewers, village inns are not the harmless places the hon. Member would have us believe. I do not blame the brewers. If I were a brewer, naturally I should push my goods. I should be advertising "Guinness is good for you." Who would not do so if they had to push the sale of Guinness I am not blaming the brewers, but we have to consider this matter from the point of view of the country, and not from the point of view of the brewers or any one section of the country. I agree with the hon. Member that it would be much better if we taxed "Red Biddy" and other of the stronger drinks more highly than we do. It seems an extraordinary thing to me that we do not impose higher taxes on champagne and other foreign wines. I suggest to hon. Members that we here can put a self-imposed tax on ourselves. Why do not hon. Members agree to drink only colonial wines?

Mr. HASLAM: I will agree not to drink "Red Biddy."

Viscountess ASTOR: Perhaps the hon. Member does not even know what "Red Biddy" is. Now is the chance for the Empire builders! Let us say: "Colonial wines for the House of Commons!" I hope very much we shall take that course. Then the hon. Member talked about the wretched nerves of the women of the
country in consequence of tea drinking. I do not see any signs of collapse in the nerves of our women. Women seem to get stronger and better every day and in every way. They get to Australia by air. They do not get there on beer. Miss Amy Johnson never drank beer. She drank nothing. Hon. Members need not worry about the nerves of the women. If the Government have to make a choice between taxing either tea and sugar or beer the women of the country will say with one voice, "Tax beer"; and the men would take the same line. I have too high a respect for the men of the country to think that in a national emergency they would not be willing even to give up their beer, if they felt, that by so doing their wives and children would get more food. The hon. Member for Canterbury (Sir W. Wayland) said he represented a district where hops are grown. I would remind him of this: Of the 630,000 tons of barley used last year no less than 38 per cent. was imported; and 66 per cent. of the barley used in distilling was also imported. It is probable that of the £240,000,000 paid for chink manufactured in this country not more than 3 per cent. goes to the farmer or the middleman. Therefore, if the hon. Member is really thinking of his agricultural workers, he will try to persuade the brewers to use only home-grown barley and hops. I do not want to be rude, but we can all look at the facts. If we tax beer the taxation is always passed on to the consumer. The brewers are doing pretty well; I do not think there is any other trade in the country which last year made a profit of £25,000,000. The hon. and gallant Member for Bournemouth (Sir H. Croft) said in a speech lately:
The Chancellor of the Exchequer must realise that there would be a great decrease in the consumption of beer as a direct result of their proposals, and in that way you are going to kill the goose that lays the golden egg.
The goose will kill itself—the goose being the brewer—if it tries to raise the price of beer too much. That is going to be the trouble.
Let us look at this from another point of view. [Interruption.] I am not saying this because I am a fanatic. [Interruption.] Sir Dennis, that has always been one of my difficulties. When anybody tackles this question of drink, the whole of the drink trade, which does not
get its propaganda from one side of the House only, I might say—[Interruption.] The hon. Member opposite knows that better than anybody else. It applies to Members of all parties. The Liberal party is really the least affected, but it has its wet spots. Whenever the drink question is raised, the point always comes up, Why we do not tackle the clubs? Why does no Government dare to tackle the clubs, which are one of the real dangers to the country The reason is because all political parties are in line with the clubs. An hon. Member sitting opposite is the one who defeated the Local Option Bill for Wales in 1924. What is happening in the homes, of the working people The hon. Member for Dr. Salter—

Mr. HASLAM: I do not know whether the hon. Lady is referring to me, but I strongly object to being called "the hon. Member for Dr. Salter."

Viscountess ASTOR: The hon. Member knows I was not calling him anything. I was talking about the hon. Member for West Bermondsey (Dr. Salter). Bermondsey has the highest unemployment rate in the metropolis. One in every seven of the residents is in receipt of Poor Law relief. There is no middle class population, except one or two doctors and solicitors. There is no cab rank or book shop; even the philanthropic Bermondsey Book Shop is now being closed. The amount spent on alcoholic drink in licensed premises there in 1925 was more than £1,250,000, 86 per cent. of which represented sales of beer and 14 per cent. represented sales of wines and spirits. A few licensees took over £20,000, more than 20 licensees took over £10,000, and 68 licensees took over £5,000. In 1925 the spendings in the borough were: Milk, £182,000; bread, £230,000; rates, £742,000. The total of that is less than the £1,250,000 spent on alcoholic drink. They spent nearly five times as much on beer as on milk, though nearly 39,000 out of a total population of 119,000 were children.
I have come back from visiting the East End. I was watching a garden or nursery school and opposite was a "pub," and one could see the people thoughtlessly going into the "pub," though the money they were spending ought to have been going into the mouths of the children. I do not want to deprive work-
ing men of all drink, but I do say that as a nation we spend too much on drink, and at a moment like this we ought to think about the nation as a whole. I wish there were some way in which the Chancellor of the Exchequer could get at the brewers without the taxation passing on to the working man; but I do say this, that the working man, like every other man, has got to make sacrifices. People talk about the sacrifices of teetotallers. A man is not always a teetotaller because he does not like drink. Thousands of working men do not take drink because they cannot afford it. They are making their sacrifice for their children and their homes. I am glad the Chancellor of the Exchequer has faced up to the question of drink, and am profoundly disappointed that hon. Members opposite should oppose this tax on drink and have been willing to tax tea and sugar. [Interruption.] I think the Chancellor of the Exchequer said in his Budget. speech that there was a question of putting a tax on tea and sugar. However, he will answer that point. [Interruption.] I am no fanatic. I said at one of the largest temperance meetings in the country that if mine were the last vote needed to make England a total prohibition country I would not give it, because I realise that England is not ready for it. I personally am ready for it. [Interruption.] There are some on the Opposition benches who are personally ready for it—but not all. It is most unfair that some of us who are considering the drink question from a social point of view should be labelled as fanatics who just want to punish those who sell drink. That is not our object. We want to have an educational programme about drink. We want to take drink out of the hands of private sellers and make its sale a national affair, so that we should not have millions spent on advertisements. Remember that it is the only trade in the country that the Government have to control. I think it is very unfair to say that I am a fanatic on this question. As a matter of fact, the country cannot afford to spend twice as much on drink as upon education, or five times as much on drink as upon milk. The Chancellor of the Exchequer must help those who are thinking of the welfare of the poor people of this country, and particularly the poor women and children, and he should not
have so much consideration for those who are only thinking of their profits. No doubt if the working man had a vote upon this question he would vote in favour of drink, but I am sure that he would decide that the drink traffic should be taken away from private enterprise.
We are faced with a big and powerful trade which is always pushing the sale of drink, which has always been against the interests of working men and working women. Upon this occasion, I am pleased to congratulate the Chancellor of the Exchequer and the Government upon having the courage to put an additional tax on drink instead of taxing tea, and sugar, and the necessities of life. I am often told that I am in favour of prohibition, but that is not so. I never speak on the subject of drink except from the point of view of the women and children and the poorest of the people, who are unable to protect themselves.

Lieut. - Commander KENWORTHY: The Noble Lady the Member for the Sutton Division of Plymouth (Viscountess Astor) drew a touching picture of the condition of the poor people of Bermondsey crowding into a public-house. Has the Noble Lady ever thought why they do this? It is because the poorest of the poor are driven into the public-house as a result of our present social system. I think it is utter hypocrisy for the Noble Lady to say that she is not in favour of prohibition when at the same time she is prepared to support a camouflage form of prohibition by placing additional and ever increasing taxes on the working man's beer.
I wish to address myself more particularly to the Chancellor of the Exchequer in order to expose an extraordinary state of affairs in this country, and that is the way that this extra tax on beer is being exploited by the brewers who made no less than £25,000,000 profit last year, as compared with £9,000,000 before the War. This tax is already being exploited by the brewers in order to make an additional profit. It has caused so much indignation that there is likely to be something akin to a beer strike. I have had figures supplied to me which show that in the North of England 86 per cent. of the beer is sold at 6d. per pint. I will take the charge which has been made for this type of
beer by the brewers since the present tax was announced. The additional tax which the Chancellor of the Exchequer has placed upon beer is £1 0s. 8d. per barrel, and the brewers have put on an additional charge of £1 4s. per barrel. This shows that the brewers are making an actual profit on the tax of 3s. 4d. per barrel. I suggest that that is a scandalous state of affairs.
I think the Chancellor of the Exchequer, if he will excuse me saying so, has been most negligent in not insisting on the brewers paying their fair share of this tax, and in allowing them to exploit the tax in this way against the interests of the public. This passing on of the Beer Duty to the consumer has caused something like a beer strike in certain cities, and if only the people were able to boycott by giving up beer and spirits and tobacco they would very soon be able to bring down this heavy taxation. There is an Amendment down to leave out Clause 1, and it is understood that the general discussion on this question should be taken on the Amendment now moved by the hon. Member for Canterbury (Sir W. Wayland). I hope those hon. Members and their friends will vote for their own Amendment, which I will do in any case. [Interruption.] It makes no difference whether there is an election or not. Hon. Members opposite can vote safely for this Amendment. The people who decide now when there is to be an election or not are the bankers of the City of London and the New York bankers, and not the Tory party. I agree with a remark which has been made by an hon. Member opposite who said that the country might be reduced to starvation on account of the policy being adopted by the Government, and that the agricultural labourers can do much to save us. I agree that the agricultural labourer deserves better treatment than he is receiving under the present Government, and I agree that this Government will ruin the country if it remains in office.
I wish to make one or two suggestions to the Chancellor of the Exchequer. I think the right hon. Gentleman ought to do something to deal with the way in which beer is being diluted, and he ought to insist upon the specific gravity of beer being stated on the barrel in which it is sold. We have no means of knowing
whether the brewers are profiteering still further in this way, and in order to secure the consumer against this danger the gravity of the beer should be marked on the barrel. The Noble Lady the Member for the Sutton Division made her usual attack upon working-men's clubs, but I doubt whether she has ever been in one of those clubs. May I point out to the Noble Lady that if a working man goes into his club he need not drink at all, but if he goes into a public-house he must drink something.

Viscountess ASTOR: The hon. and gallant Gentleman has stated that I made an attack on the working-men's club, but I did nothing of the kind. I know why the hon. and gallant Gentleman is using that argument—he is afraid of the members of working-men's clubs.

Mr. HASLAM: In the vast majority of villages there are no clubs.

Lieut.-Commander KENWORTHY: If you increase the tax on beer you also increase the tax on workmen's clubs. I think it is a great advantage for working men to belong to these clubs. [Interruption.] Some time ago when I supported local option I had the whole power of the brewing interest against me. I would like to say that I am a. temperance reformer, and I supported the Chancellor' of the Exchequer upon local option. I support the club movement, because it is not necessary for a working man who joins a club to drink and because these clubs are doing valuable social work. I agree with the Noble Lady in one remark she made that the Chancellor of the Exchequer might have found a far better means of raising revenue. Why did the right hon. Gentleman not raise the tax on French wines and French brandy? Was it for the same reason that the cut in the unemployment wage was insisted upon by the American financiers? Was it because he had been put in the power of these foreign financiers? This additional tax has been placed on beer in order to support the policy of the Tory party, and I hope it will prove to be the beginning of the destruction of the present Government. For these reasons, I shall vote for the Amendment.

Mr. BEAUMONT: In common, I am sure, with the rest of the Committee, I have listened with a great deal of interest to the speech of the hon. and gallant Member for Central Hull (Lieut.-Com-
mander Kenworthy), and I am sure that we all look forward to seeing him as the English Gandhi, suitably arrayed, with goats supplying his milk, and possibly the Noble Lady the Member for the Sutton Division of Plymouth (Viscountess Astor) playing the part of Miss Slade. In spite, however, of that happy vision, I cannot join with the hon. and gallant Member in his support of this Amendment, although I am a believer in the value of drinking beer, and I am going to make an appeal to my hon. Friends who have introduced this Amendment to withdraw it.

Lieut.-Commander KENWORTHY: We will not let them.

Mr. BEAUMONT: The hon. and gallant Member may be able to prevent its withdrawal, but I can at least try, as several hon. Members sitting with him have done not so very long ago in similar circumstances. The hon. and gallant Member stated, as I understood him, that the drinking of beer was confined to the poorest classes. I do not know if he meant to give that impression, but that is practically what he said, and it is, of course, absolute nonsense. The drinking of beer, I am pleased to say, goes through every class. I join with my hon. Friends who are responsible for this Amendment in regretting that it was found to be necessary to put this tax on beer, and I regret that it was not put on tea, because I believe that if there were more beer and less tea drunk in this country, the country would be a better place. [Interruption.] That is my firm and considered conviction, and, in spite of the fact that the Noble Lady does not agree with me—I did not expect her to do so—I still hold it. I should like to see the hon and gallant Member for Central Hull and the Noble Lady enjoying a tankard together in the smoking-room. It would be a noble sight, and I feel that possibly they might both be the better for it.
I agree with what has been said about the effect of this tax on the working man, and the real hardship which the increase in the price of beer is going to inflict upon him. If the figures given by the hon. and gallant Member are correct, I agree that it is a most iniquitous thing that a profit should be made by the industry out of this tax. Although I am strongly opposed to what is called temperance
legislation, I have no connection whatever with the brewing industry, and I have no interest in their making any profit at all. Certainly I have no desire that they should make profits out of increased taxation, and I hope that, if that is done, the Government will do anything that they can to prevent it. With all that, and with my realisation of the hardship that the tax is going to entail, I again appeal to my hon. Friends to withdraw their Amendment, and for this reason. We have heard a great deal during the last few days about equality, or inequality, of sacrifice. Personally, I pay very little attention to what is said about that, because I have always believed that there has never been any such thing as equality of sacrifice. The patriotic people, the good citizens, will always pay more than the bad citizens. But I am sick and tired of hearing the squeals and screams that go out from people who have to pay anything, and I do say that there is at least one patriotic section of the community, namely, the beer drinkers, who bear their sacrifice without complaining. Therefore, I venture to express the hope that my hon. Friends will withdraw their Amendment.

Mr. R. RICHARDSON: I listened with somewhat mixed feelings to the, shall I say, harrowing remarks of the Noble Lady, the Member for the Sutton Division of Plymouth (Viscountess Astor). She seems to know so much, but gives us very few facts indeed. She knows that I am connected with the working men's clubs of this country. I have the honour to be the President of that organisation, as I have been for some few years, and as I hope to continue to be. May I tell the Noble Lady that I know the working men's clubs of this country? May I say that in 1901, when there were very few clubs in the county of Durham, the convictions there for drunkenness were 135 per 10,000, while to-day when there are two, three and four clubs in some of the larger villages, the figure is less than 20?

Viscountess ASTOR: Does not the hon. Gentleman know as well as I do that it is much more difficult to convict in clubs than it is in public houses?

Mr. RICHARDSON: I want to combat that statement by telling the Noble Lady that the amount of alcohol consumed in
clubs is very much below that consumed in public houses. May I inform her that in my own county the average expenditure per week per man is something between 2s. and 2s. 6d.? They have had to pay 6d. for a pint of beer in the past, and it will be 7d. in the future—[Interruption]. The Noble Lady has had her fair say, and I am sure she will allow me to continue without interruption. I want to tell her that the members of our clubs are respectable members of society, that they are good citizens of this country, that they do the best they can for their children, and that they would not take a pint of beer if a bairn wanted a pint of milk; and, when we find that the crime of drunkenness is decreasing so rapidly, I cannot help thinking that the Noble Lady is living in the latter part of last century. Things have altered, although she cannot see it.
Undoubtedly, the drink bill has gone up, but why? There was a time, in 1913, when the tax on a standard barrel of beer was 7s. 9d. No wonder the drink bill was lower then than it is to-day, when the tax is £6 14s., less the drawback of £1 which the present Lord President of the Council, when he was Chancellor of the Exchequer, granted to us because he thought that the worker who drank beer was being asked to pay more than his share. I know that a considerable percentage of the miners of this country drink beer, but I hate and detest the idea of any of them getting drunk. I have, however, an easy conscience on that score, for the brewers are seeing to it that the beer is pretty well watered, and they will continue to do so in the future. The figures given by my hon. and gallant Friend were taken from the books of a co-operative brewery, which, I may remark, comes as near as possible to the Noble Lady's suggestion that the whole thing should be nationalised. I am with her there, and will support her right through. Of the beer consumed by the workers in Durham, about 86 per cent. is of a gravity of 38 or 40; only about 5 per cent. is higher, and the rest is lower still, so that in that case the brewers get an even greater profit on the transaction. They have taken the Chancellor's figure of £1 16s. per standard barrel, and have passed it down and down until it is £1. 4s. on a barrel of a gravity of 38.
I wish that the Chancellor would follow my hon. and gallant Friend's suggestion, and make the brewers declare the gravity of the beer. That is a very important point. Then I should like the Noble Lady to understand that the clubs are not tied to any particular brewer; they can make the best bargain that is possible with the brewers, and in that way they are able to get from the brewers something back for the consumer; but when the brewers are making 3s. 4d. on every barrel because of this tax, I say that that is infamous, and I welcome the statement of the Prime Minister that there is to be a Bill to stop all this profiteering out of the people of this country. If that is done in regard to beer, we shall thank the right hon. Gentleman more than enough. There are other people also who make these profits. Those who bottle the beer—

The CHAIRMAN: I am afraid it is nearly time I reminded the hon. Member that he is now dealing with matters which do not come under this Amendment.

Mr. RICHARDSON: I am only trying to answer the arguments that have been put from the other side. I know I must not follow all that has been said, but I should like to point out to the Chancellor of the Exchequer that an extra 8d. or 10d. per dozen is being charged for half-pint bottles, which gives the bottlers something like 9s. a barrel. I told the Chancellor of the Exchequer on the last occasion that, if he had come to us, we could have given him valuable information. Here are the facts which show that, every time any tax is levied, the brewers take out of the tax a good deal of the hard-earned money of the workers. I am putting these arguments to the right hon. Gentleman on behalf of the large number of working men who are members of our working men's clubs. I agree that more will probably be spent on beer during next year, but I want to tell the Chancellor that this is just about the last straw on the camel's back, and that he may find that this tax will not realise what he set out to get. It is too much to ask of the worker, when you remember that he is in a worse position to-day than when he was given the rebate of £1 a barrel. I agree that this Amend-
ment would do something, but I should like the Chancellor to tell the brewers that they must play the game fairly as regards increasing the price of beer to the consumer; to see to it that they do not make a profit out of the tax, as they have done on every occasion in the past; and, most important of all, to make them declare the gravity of the beer that they supply, because I think it will be found that they have been making money from that source also.
I make no apology for what I said the other day. I do not want to see any tax on tea, or sugar, or anything of that kind. I am against any indirect taxation whatever, and in that regard I had the Chancellor of the Exchequer for my teacher. I would go where the money is—to those people who have broad enough backs, not only to bear the increased taxation that has been imposed this year, but a good deal more. They ought to give something back, so that we may have, not equality of sacrifice only, but equality of existence in this country. Wages have gone down beyond all knowledge. As a result, beer has suffered, milk has suffered, everything that the worker wants in his home has suffered. Let the Chancellor of the Exchequer turn to the method of taxation which he himself has expounded many times. In that way he will do what is right by the poorest of our citizens, and will be playing the game as it ought to be played. I agree with the Movers of this Amendment, and I shall support it.

5.0 p.m.

Mr. BECKETT: I want also to support the Amendment, because I think this tax is one that should have been scrupulously avoided at a time like this. We are told that the whole basis upon which this very heavy extra taxation has been put on the nation is a sudden crisis which demands the Government doing a very unpopular thing. No speaker on the benches opposite has pretended to like imposing all this extra taxation. The whole case has been that, much as we dislike it, it was essential to call upon the nation to bear it under the special circumstances that have arisen. You can only ask the nation to accept very heavy extra sacrifice if you can persuade it that the taxation is being
imposed in a completely fair and impartial spirit. Directly the nation gets the idea that a small group of people are able to get their ideas considered in the ordinary way, are taking advantage of a crisis to ride their particular hobby horse and get the advantage of their own particular fad, you get a feeling of resentment, however just your primary call for sacrifice may be.
One of the most likeable characteristics of the party opposite has been their good natured tolerance of any social custom which did not interfere with their own vested interests, and it is an extraordinary thing to find that, just as the worn-out and dead hand of an effete Liberalism crippled these benches for many months, directly it has moved over to their ranks we find the Conservative party supporting a tax on the innocent recreations and customs of the people. If hon. Members had been told three months ago that they would be supporting the Chancellor of the Exchequer in another of his fantastic attempts to interfere with the life of the people by devious means, they would have been the most surprised Members who could possibly have been found. Certainly I shall be surprised if even the peculiar ties that bind the present Front Bench are going to take them into the Lobby in support of this proposal. I oppose it because it is a most unfair way of interfering with the people's life. I do not agree but I can respect and sympathise with the hon. Member for Dundee (Mr. Scrymgeour) who, believing that beer is a poison, would desire to prevent anyone being able to obtain it, but I cannot understand the attitude of mind which says, "This is a dreadful thing, beer is an inequity; therefore let us get a little more money out of it for the public Exchequer."
It is not at all fair of the Noble Lady—I do not think she can have meant it seriously—to suggest that we who are opposed to this tax would like to see the money raised out of tea, sugar or other necessities. There are many ways in which it could be raised. It might be raised from a tax on expensive headgear. It could be raised by a tax on luxuries. It could be raised by a tax on a great many things which are less essential to the ordinary life of a very large majority of the people. This is not an equitable
tax, and it is not an equitable way of meeting a national crisis. It is not my business—and I hope hon. Members will not resent it—to suggest to them methods of carrying out their policy, but I think they have been very misled in their psychology and have departed very much from ordinary Tory tradition and custom and precedent when they precede the cut in the standard of living which the Government desires by making beer, tobacco, and entertainments dear. That is a very bad way to get the working-class into the mood that the Government and their supporters desire them to be in. This tax is a very unwise one from that point of view. It is very unfair, because it penalises the innocent recreation of a very large section of our people. It is not a question of money. You could put a much larger tax on expensive seats at the opera and raise money in that way. There is just as much harm in having a taste for going to the opera as in having a taste for going to the local club or public-house and discussing things there with your friends. When we can afford to subsidise opera for people who like it, I do not see why we should tax beer for people who happen to like that.
This is not a tax that runs on party lines. Some Members on this side are strongly in support of it and others are against it. Even the small group with whom I usually act is divided on this issue. We have had an international clash between Scotland and England. While united on the question of a revolution, we are disunited on the question of beer. Therefore, I speak as a completely solitary voice. I know the views of the Chancellor of the Exchequer on this subject. I have no hope that anything that we may say will dissuade him from the attitude that he takes, but I do not see why any party should be tied to his particular and peculiar view upon this issue. All parties are in disagreement on it. The way we troop into the Lobby for things that we heartily disapprove of because someone on the Front Bench tells us is an abominable disgrace to an elected assembly. [Interruption,] My hon. and gallant Friend the Member for Central Hull (Lieut.-Commander Kenworthy) often leads the way into it. We are sent here as free men to represent the electorate, and on this proposal we ought to have a free vote to decide
whether we are going to do this very mean thing to a very large and very good section of the community.

The FINANCIAL SECRETARY to the TREASURY (Major Elliot): May I appeal to the Committee. We are working under a limitation of time. [Interruption.] It is the decision of the House and not of any single Member. I ask the Committee whether it would not now be possible to come to a decision. The point that has been raised has, unfortunately, been befogged by a wrangle between temperance and non-temperance advocates, into which I do not intend to allow myself to be drawn. The country is short of revenue. Revenue has to be raised. There is always a feeling of injustice on the part of anyone on whom the burden is laid. Of all those who have spoken I sympathise more particularly with my hon. Friend the Member for Aylesbury (Mr. Beaumont), who said that he was sick and tired of the squeal that comes from everyone when his particular line is touched, and he hoped the beer-drinking population would stand up and take the burden that was laid on them for the good of the finances of the country. There is no other reason behind the introduction of this proposal.
We want to get £40,000,000 this year to square our annual Budget. This is 10 per cent. of that proposal, Is that an unreasonable thing? Undoubtedly, it is a burden particularly upon the people in the agricultural districts. But I am certain that my hon. Friends recognise the difficulty in which the country finds itself. They recognise, as the whole country recognises, that, whoever is called upon to make sacrifices, is not making sacrifices because he wishes to do so, but because he has to do so. It is a call that has been sent out to all sections, and we ask all sections to respond to the call. The Amendment would involve a loss to the revenue of something like £1,750,000 in 1931–32 and of £4,000,000 in a full year. It is all very well for the hon. Member for Peckham (Mr. Beckett) to say he knows plenty of other ways in which it could be raised. I do not think it is treating the Committee with full respect to suggest a tax on hats.

Mr. BECKETT: It would not he fair to take that one particular suggestion. There are many others.

Major ELLIOT: I am only taking the suggestion that the hon. Member brought forward. The hon. and gallant Gentleman the Member for Central Hull (Lieut.-Commander Kenworthy) suggested, among other things, a. higher tax on French wines. It would be quite impossible to raise the necessary revenue by that means. The Chancellor of the Exchequer is not increasing the duties on these things, because it would not bring in the revenue. The governing factor in the situation is what tax will most swiftly bring in the revenue with the least injury to the fabric of the life of the nation as a whole. I can imagine the indignation on the benches opposite if the Chancellor proposed to tax tea and sugar. The welkin would have been rent with complaints as to the increase in the cost of living, the poor child who could not get sugar in its tea and the working women who would have to drink hot water instead of the fluid that cheers but not inebriates. The Opposition have made their case, and I appeal more particularly to hon. Members on our own side. They have difficulties, because they say they opposed these taxes in the past when they were put on by whatever Chancellor. Having made their protest, could they not now see their way to withdraw the Amendment and allow the Committee to pass on to the other important business that lies before us?

Sir W. WAYLAND: Having listened to the Financial Secretary and having registered a very strong protest against what I still consider to be an iniquitous tax against a section of the community, I beg, in the circumstances, to ask leave to withdraw the Amendment.

HON. MEMBERS: No.

Colonel GRETTON: The tax is obviously only an emergency tax. Fortunately, it lasts only for six months. [Interruption.] Please do not interrupt; it will only waste time. I intend to say what I want to say, and I shall say it as briefly as possible, so I shall be glad if hon. and right hon. Gentlemen opposite will desist from interrupting. It is a tax which runs until the next Budget. I am going to support it, because it is an emergency tax and on no other ground. On every other ground I should have to oppose this tax and protest against it. If hon. Gentlemen on the benches opposite go to a Division, I shall vote for the
Government. I assure the Chancellor of the Exchequer that this is a tax which is greatly resented. I am not speaking for the brewers but for the brewers' customers. There is a great deal of dislike. It seems that the Chancellor of the Exchequer wanted money quickly and that he wrote down in haste "£4,500,000," "31s." and "fourpence a pint," but he forgot that there were other sources of revenue.
The Debate to-day has been a little indecent in one respect. It is surprising that all the total abstinence advocates have made use of this occasion and have urged that some additional burden should be imposed upon those against whom they are opposed on this question. That is not acting in a national or patriotic spirit. Perhaps I am not really surprised, because these faddists always take every opportunity of calling attention to the expenditure upon drink. An hon. Member opposite talked about the brewers being unreasonable, and apparently based his assertion upon a co-operative brewery, but I trust that he will not associate the general body of brewers with that assertion.

Mr. RICHARDSON rose—

Colonel GRETTON: No, I am not going to give way. I am going to say a few words about the attitude of the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy). He made assertions with great volubility. He gave no foundation for his statement that the brewers are making a profit out of the duty. There is nothing in it. I am sure that he has made a mistake. He has got hold of some figures which are wrong. My experience in regard to the matter is that the brewers with whom I have talked are very hard put to it to make both ends meet in regard to this tax. There is no profit in the tax. There is nothing but loss staring them in the face unless they can make both ends meet. When everybody is making sacrifices in the national interest, when we require the money to meet the emergency during the financial year, I think that even those who carry on a vendetta against brewers on every occasion, reasonable or unreasonable, nearly always unreasonable, might refrain from attacks upon them.

Mr. MUGGERIDGE: I wish to make a few observations about this tax because of the plea that was put forward by the Financial Secretary. He said that the agricultural population who are very largely affected by it, as well as the general working-class population, would be quite willing, owing to the fact that they realise that there is an emergency, to accept this tax as a patriotic duty. That is not exactly the position. You may remove your opposition to a tax of this kind, but it does not follow that in your private capacity you will drink the beer upon which the tax is levied. The right hon. Gentleman is relying upon the expectation that the working-classes will drink the beer. They may accept the extra tax, but they will not pay it unless they drink the beer. It is quite conceivable that a large number of people may not drink the beer, and that the tax may not produce what it is expected to produce.
It is very remarkable that a Chancellor of the Exchequer who has been identified so closely with the temperance movement should now be relying upon very plentiful drinking by the working classes of this country. He is expecting to balance his Budget by getting the workers not to diminish, but to continue their drinking habits. The more steadily they drink and become unsteady, the steadier becomes the pound sterling. This tax is deliberately based upon the fact that the working classes will continue to drink and that a patriotic duty impels them to drink even more heavily than before. The mere passing of the tax does not bring the money into the coffers of the State, and it is very remarkable that a Chancellor of the Exchequer, who has been so distinguished for his advocacy of teetotalism, should be relying now upon expectations based upon the continued drinking habits of the people. In the circumstances, I hope that the Amendment will not be withdrawn. If you are going to put on the tax, make it a tax that will encourage people to drink, and not one that will discourage them. I imagine that the Amendment to reduce the tax would encourage the people to drink and would therefore carry out the expectations of the Chancellor of the Exchequer and bring in a greater sum to the revenue.

Mr. RICHARDSON: I should like to make an explanation in reply to what was said by the right hon. and gallant Gentleman the Member for Burton (Colonel Gretton). The breweries I quoted have in the past always given a gravity of two degrees higher than the gravity of the ordinary brewery, and at the end of the half-year have returned 8s. dividend to those who purchased from them. I wonder whether the right hon. and gallant Member can now say that breweries do not get the money. There is an indication that you can make at least 10s. profit upon a barrel. Bass, Ratcliffe and Gretton have passed on every penny of the tax, and Worthing-tons as well. It has all been passed on, and nothing has gone to the benefit of the consumer.

Mr. SCRYMGEOUR: It would have been a very effective demonstration of patriotism and love of Empire if the brewers had undertaken to meet this extra taxation. Figures have been presented here in the presence of representatives of breweries that they actually made, in the midst of all this depression of the general trade of the country, as much as £25,000,000, and they are still taking their miserable portion of this taxation which a temperance Chancellor of the Exchequer thinks fit to impose. The deliverances which generally come from the Noble Lady the Member for Sutton (Viscountess Astor) are evidence of the travesty of all this talk from a temperance standpoint. If beer is a legitimate commodity it ought to be relieved of all taxation. If it is a requisite commodity and it is considered advisable that it should be provided, why put upon it taxation which we know will be taken from the general body of the working people? If, on the other hand, it is not considered advisable—and the Chancellor of the Exchequer does not consider it advisable, because he has declared from temperance platforms in the country over and over again what a tremendous national wastage it involves—why does the right hon. Gentleman sit there absolutely helpless and proceed along the same old line of exacting revenue from it? Notable economists are having their deliverances circulated showing the immense benefit that would be acquired if the whole demoralising business were brought to a standstill instead of taking this taxation.
Why pursue this wretched plan of taking revenue out of what is perfectly well known to be a prolific source of infamy and a business into which no man with self-respect and with the highest ideals of Empire and people would enter. To stand up in public assembly and defend it and to proceed to take the money under present conditions shows the

absurdity of the whole thing. It is a disgrace for a National Government with a temperance Chancellor of the Exchequer to try and get more money out of the wretched Beer Duty.

Question put, "That '£6 14s.' stand part of the Clause."

The Committee divided: Ayes, 274; Noes, 180.

Division No. 503.]
AYES.
[5.29 p.m.


Acland-Troyte, Lieut.-Colonel
Cranborne, Viscount
Hennessy, Major Sir G. R. J.


Aitchison, Rt. Hon. Craigie M.
Crichton-Stuart, Lord C.
Hills, Major Rt. Hon. John Waller


Albery, Irving James
Croft, Brigadier-General Sir H.
Hope, Sir Harry (Forfar)


Allen, Sir J. Sandeman (Liverp'l., W.)
Crookshank, Capt. H. C.
Hore-Belisha, Leslie


Allen, Lt.-Col. sir William (Armagh)
Croom-Johnson, R. P.
Horne, Rt. Hon. sir Robert S.


Amery, Rt. Hon. Leopold C. M. S.
Culverwell, C. T. (Bristol, West)
Howard-Bury, Colonel C. K.


Ashley, Lt.-Col. Rt. Hon. Wilfrid W.
Cunliffe-Lister, Rt. Hon. Sir Philip
Hudson, Capt A. U. M. (Hackney, N.)


Aske, Sir Robert
Dalkeith, Earl of
Hurd, Percy A.


Astor, Maj. Hon. John J. (Kent, Dover)
Dalrymple-White, Lt.-Col. Sir Godfrey
Hurst, Sir Gerald B.


Astor, Viscountess
Davidson, Rt. Hon. J. (Hertford)
Hutchison, Maj.-Gen. Sir R.


Atholl, Duchess of
Davies, Dr. Vernon
Inksip, Sir Thomas


Atkinson, C.
Davies, Maj. Geo. F. (Somerset, Yeovil)
Iveagh, Countess of


Baldwin, Rt. Hon. Stanley (Bewdley)
Davison, Sir W. H. (Kensington, S.)
Jones, Llewellyn-, F.


Balfour, George (Hampstead)
Dawson, Sir Philip
Jones, Sir G. W. H. (Stoke New'gton)


Balfour, Captain H. H. (I. of Thanet)
Denman, Hon. R. D.
Jones, Henry Haydn (Merioneth)


Balniel, Lord
Despencer-Robertson, Major J. A. F.
Jones, Rt. Hon Leif (Camborne)


Beamish, Rear-Admiral T. P. H.
Dixey, A. C.
Jowitt, Rt. Hon. Sir W. A. (Preston)


Beaumont, M. W.
Dixon, Captain Rt. Hon. Herbert
Kedward, R. M. (Kent, Ashford)


Bellairs, Commander Carlyon
Duckworth, G. A. V.
Kindersley, Major G. M.


Bennett, Sir E. N. (Cardiff, Central)
Dudgeon, Major C. R.
Knight, Holford


Berry, Sir George
Dugdale, Capt. T. L.
Knox, Sir Alfred


Betterton, Sir Henry B.
Eden, Captain Anthony
Lamb, Sir J. Q.


Bevan, S. J. (Holborn)
Edge, Sir William
Lambert, Rt. Hon. George (S. Molton)


Birchall, Major Sir John Dearman
Edmondson, Major A. J.
Lane Fox, Col. Rt. Hon. George R.


Blindell, James
Elliot, Major Walter E.
Latham, H. P. (Scarboro' & Whitby)


Boothby, R. J. G.
Elmley, Viscount
Law, Sir Alfred (Derby, High Peak)


Bowater, Col. Sir T. Vansittart
England, Colonel A.
Leighton, Major B. E. P.


Bowyer, Captain Sir George E. W.
Erskine, Lord (Somerset, Weston-s-M.)
Lewis, Oswald (Colchester)


Boyce, Leslie
Evans, Capt. Ernest (Welsh Univer.)
Llewellin, Major J. J.


Bracken, B.
Everard, W. Lindsay
Locker-Lampson, Rt. Hon. Godfrey


Braithwaite, Major A. N.
Falle, Sir Bertram G.
Long, Major Hon. Eric


Briscoe, Richard George
Ferguson, Sir John
Lovat-Fraser, J. A.


Broadbent, Colonel J.
Fielden, E. B.
McConnell, Sir Joseph


Brown, Col. D. C. (N'th'l'd., Hexham)
Fison, F. G. Clavering
MacDonald, Rt. Hon. J. R. (Seaham)


Brown, Ernest (Leith)
Foot, Isaac
MacDonald, Malcolm (Bassetlaw)


Brown, Brig.-Gen. H. C. (Berks, Newb'y)
Ford, Sir P. J.
Macdonald, Capt. P. D. (I. of W.)


Buchan, John
Forestler-Walker, Sir L.
Macpherson, Rt. Hon. James I.


Buchan-Hepburn, P. G. T.
Fremantle, Lieut.-Colonel Francis E.
Macquisten, F. A.


Bullock, Captain Malcolm
Galbraith, J. F. W.
Maitland, A. (Kent, Faversham)


Burgin, Dr. E. L.
Gault, Lieut.-Col. A. Hamilton
Makins, Brigadier-General E.


Butler, R. A.
George, Major G. Lloyd (Pembroke)
Margesson, Captain H. D.


Butt, Sir Alfred
George, Megan Lloyd (Anglesea)
Marjoribanks, Edward


Cadogan, Major Hon. Edward
Gillett, George M.
Markham, S. F.


Caine, Hall-, Derwent
Gilmour, Lt.-Col. Rt. Hon. Sir John
Mason, Colonel Glyn K.


Campbell, E. T.
Glyn, Major R. G. C.
Merriman, Sir F. Boyd


Carver, Major W. H.
Graham, Fergus (Cumberland, N.)
Millar, J. D.


Castle Stewart, Earl of
Granville, E.
Milne, Wardlaw-, J. S.


Cautley, Sir Henry S.
Grattan-Doyle, Sir N.
Mitchell, Sir W. Lane (Streatham)


Cayzer, Sir C. (Chester, City)
Gray, Miner
Monsell, Eyres, Com. Rt. Hon. Sir B.


Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.)
Greaves-Lord, Sir Walter
Moore, Lieut.-Colonel T. C. R. (Ayr)


Cecil, Rt. Hon. Lord H. (Ox. Univ.)
Gretton, Colonel Rt. Hon. John
Morris, Rhys Hopkins


Chadwick. Capt. Sir Robert Burton
Griffith, F. Kingsley (Middlesbro' W.)
Morris-Jones, Dr. J. H. (Denbigh)


Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)
Gritten, W. G. Howard
Morrison, W. S. (Glos., Cirencester)


Chamberlain, Rt. Hon. N, (Edgbaston)
Gunston, Captain D. W.
Muirhead, A. J.


Chapman, Sir S.
Hacking, Rt. Hon. Douglas H.
Nail-Cain, A. R. N.


Christie, J. A.
Hall, Lieut.-Col. Sir F. (Dulwich)
Nathan, Major H. L.


Church, Major A. G.
Hamilton, Sir George (Ilford)
Newman, Sir R. H. S. D. L. (Exeter)


Clydesdale, Marquess of
Hamilton, Sir R. (Orkney & Zetland)
Nicholson, O. (Westminster)


Cobb, Sir Cyril
Hammersley, S. S.
Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld)


Cockerill, Brig-General Sir George
Hanbury, C.
O'Connor, T. J.


Cohen, Major J. Brunel
Hannon, Patrick Joseph Henry
Oliver, P. M. (Man., Blackley)


Colfox, Major William Philip
Harbord, A.
Ormsby-Gore, Rt. Hon. William


Colman, N. C. D.
Harris, Percy A.
Owen, Major G. (Carnarvon)


Colville, Major D. J.
Hartington, Marquess of
Penny, Sir George


Conway, Sir W. Martin
Harvey, Major S. E. (Devon, Totnes)
Percy, Lord Eustace (Hastings)


Cooper, A. Duff
Henderson, Capt. R. R.(Oxf'd, Henley)
Perkins, W. R. D.


Courthope, Colonel Sir G. L.
Heneage, Lieut.-Colonel Arthur P.
Peters, Dr. Sidney John


Peto, Sir Basil E. (Devon, Barnstaple)
Savery, S. S.
Todd, Capt. A. J.


Power, Sir John Cecil
Scott, James
Train, J.


Pownall, Sir Assheton
Shakespeare, Geoffrey H.
Tryon, Rt. Hon. George Clement


Purbrick, R.
Shepperson, Sir Ernest Whittome
Turton, Robert Hugh


Pybus, Percy John
Simms, Major-General J.
Wallace, Capt. D. E. (Hornsey)


Ramsay, T. B. Wilson
Simon, E. D. (Manch'ter, Withington)
Walters, Rt. Hon. Sir J. Tudor


Ramsbotham, H.
Simon, Rt. Hon. Sir John
Ward, Lieut.-Col. Sir A. Lambert


Rathbone, Eleanor
Skelton, A. N.
Warrender, Sir Victor


Rawson, Sir Cooper
Smith, Louis W. (Sheffield, Hallam)
Waterhouse, Captain Charles


Reid, David D. (County Down)
Smith, R. W. (Aberd'n & Kinc'dine, C.)
Wells, Sydney R.


Remer, John R.
Smith-Carington, Neville W.
White, H. G.


Rentoul, Sir Gervais S.
Smithers, Waldron
Williams, Charles (Devon, Torquay)


Rhys, Hon. C. A. U.
Snowden, Rt. Hon. Philip
Wilson, G. H. A. (Cambridge U.)


Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Somerset, Thomas
Windsor-Clive, Lieut.-Colonel George


Roberts, Sir Samuel (Ecclesall)
Somerville, A. A. (Windsor)
Winterton, Rt. Hon. Earl


Robinson, Sir T. (Lancs, Stretford)
Southby, Commander A. R. J.
Withers, Sir John James


Rodd, Rt. Hon. Sir James Rennell
Spender-Clay, Colonel H.
Womersley, W. J.


Rosbotham, D. S. T.
Stanley, Lord (Fylde)
Wood, Rt. Hon. Sir Kingsley


Rothschild, J. de
Stanley, Hon. O. (Westmorland)
Wood, Major Mckenzie (Banff)


Ruggles-Brise, Colonel E.
Stuart, Hon, J. (Moray and Nairn)
Wright, Brig.-Gen. W. D. (Tavist'k)


Russell, Alexander West (Tynemouth)
Sueter, Rear-Admiral M. F.
Young, Rt. Hon. Sir Hilton


Russell, Richard John (Eddisbury)
Thomas, Rt. Hon. J. H. (Derby)



Salmon, Major I.
Thomas, Major L. B. (King's Norton)
TELLERS FOR THE AYES.—


Samuel, A. M. (Surrey, Farnham)
Thompson, Luke
Sir Frederick Thomson and Mr.


Sandeman, Sir N. Stewart
Thomson, Mitchell-, Rt. Hon. Sir W.
Glassey.


Sassoon, Rt. Hon. Sir Philip A. G. D.
Titchfield, Major the Marquess of



NOES.


Adamson, W. M. (Stall., Cannock)
Hall, J. H. (Whitechapel)
Morley, Ralph


Alexander, Rt. Hon. A. V. (Hillsbro')
Hall, Capt. W. G. (Portsmouth, C.)
Mort, D. L.


Alpass, J. H.
Hamilton, Mary Agnes (Blackburn)
Murnin, Hugh


Ayles, Walter
Hardie, David (Rutherglen)
Naylor, T. E,


Baker, John (Wolverhampton, Bliston)
Hayes, John Henry
Noel-Buxton, Baroness (Norfolk, N.)


Baldwin, Oliver (Dudley)
Henderson, Arthur, Junr. (Cardiff, S.)
Oliver, George Harold (Ilkeston)


Barnes, Alfred John
Henderson, Joseph (Ardwick)
Palln, John Henry


Batey, Joseph
Henderson, W. W. (Middx,, Enfield)
Paling, Wilfrid


Beckett, John (Camberwell, Peckham)
Herriotts, J.
Palmar, E. T.


Bennett, William (Battersea, South)
Hicks, Ernest George
Parkinson, John Allen (Wigan)


Bowen, J. W.
Hirst, G. H. (York W. R. Wentworth)
Pole, Major D. G.


Bowerman, Rt. Hon. Charles W.
Hirst, W. (Bradford, South)
Potts, John S.


Bromfield, William
Hoffman, P. C.
Price, M. P.


Bromley, J.
Hollins, A.
Ouibell, D. J. K.


Brooke, W.
Hopkin, Daniel
Raynes, W, R.


Brown, W. J. (Wolverhampton, West)
Horrabin, J. F.
Riley, Ben (Dewsbury)


Buchanan, G.
Isaacs, George
Ritson, J.


Burgess, F. G.
Jenkins, Sir William
Romeril, H. G


Buxton, C. R. (Yorks, W. R. Elland)
John, William (Rhondda, West)
Rowson, Gay


Cameron, A. G.
Jones, J. J. (West Ham, Silvertown)
Samuel, H. Walter (Swansea, West)


Cape, Thomas
Jowett, Rt. Hon. F. W.
Sawyer, G. F.


Carter, W. (St. Pancras, S.W.)
Kelly, W. T.
Sexton, sir James


Charleton, H. C.
Kennedy, Rt. Hon. Thomas
Shaw, Rt. Hon. Thomas (Preston)


Chater, Daniel
Kenworthy, Lt.-Com. Hon. Joseph M.
Shepherd, Arthur Lewis


Clarke, J. S.
Kinley, J.
Shield, George William


Cluse, W. S.
Kirkwood, D.
Shillaker, J. F.


Clynes, Rt. Hon. John R.
Lansbury, Rt. Hon. George
Simmons, C. J.


Cocks, Frederick Seymour
Lathan, G. (Sheffield, Park)
Sitch, Charles H.


Compton, Joseph
Law, A. (Rosendale)
Smith, Ben (Bermondsey, Rotherhithe)


Cove, William G.
Lawrence, Susan
Smith, Frank (Nuneaton)


Cripps, Sir Stafford
Lawrie, Hugh Hartley (Stalybridge)
Smith, Tom (Pontefract)


Daggar, George
Lawson, John James
Snowden, Thomas (Accrington)


Dalton, Hugh
Lawther, W. (Barnard Castle)
Sorensen, R.


Davies, D. L. (Pontypridd)
Leach, W.
Stamford, Thomas W.


Day, Harry
Lee, Frank (Derby, N.E.)
Stephen, Campbell


Dukes, C.
Lee, Jennie (Lanark, Northern)
Strachey, E. J. St. Los


Duncan, Charles
Leonard, W.
Strauss, G. R.


Ede, James Chuter
Lewis, T. (Southampton)
Sullivan, J.


Edmunds, J. E.
Logan, David Gilbert
Sutton, J. E.


Edwards, C. (Monmouth, Bedwellty)
Longbottom, A. W.
Taylor, R. A. (Lincoln)


Edwards, E. (Morpeth)
Longden, F.
Taylor, W. B. (Norfolk, S.W.)


Gardner, B. W. (West Ham, Upton)
Lunn, William
Thorne, W. (West Ham, Plaistow)


Gardner, J. P. (Hammersmith, N.)
Macdonald, Gordon (Ince)
Thurtle, Ernest


Gibbins, Joseph
McElwee, A.
Tillett, Ben


Gill, T. H.
Mansfield, W.
Tinker, John Joseph


Gossling, A. G.
March, S.
Toole, Joseph


Gould, F.
Marcus, M.
Tout, W. J.


Graham, D. M. (Lanark, Hamilton)
Marley, J.
Turner, Sir Ben


Greenwood, Rt. Hon. A. (Colne)
Marshall, Fred
Vaughan, David


Grenfell, D. R. (Glamorgan)
Mathers, George
Viant, S. P.


Griffiths, T. (Monmouth, Pontypool)
Maxton, James
Walkden, A. G.


Groves, Thomas E.
Mille, J. E.
Walker, J.


Grundy, Thomas W.
Milner, Major J.
Wallace, H. W.


Hall, F. (York, W.R., Normanton)
Montague, Frederick
Watkins, F. C.


Hall, G. H. (Merthyr Tydvil)
Morgan, Dr. H. B.
Watson, W. M. (Dunfermline)




Watts-Morgan, Lt.-Col D. (Rhondda)
Whiteley, William (Blaydon)
Wilson R. J. (Jarrow)


Wedgwood, Rt. Hon. Joslah
Wilkinson, Ellen C.
Young, Sir R. (Lancaster, Newton)


Wellock, Wilfred
Williams, David (Swansea, East)



Welsh, James C. (Coatbridge)
Williams, E. J. (Ogmore)
TELLERS FOR THE NOES.—


West, F. R.
Williams, Dr. J. H. (Llanelly)
Mr. Robert Richardson and Mr.


Westwood, Joseph
Wilson, C. H. (Sheffield, Attercliffe)
Muggeridge.


Whiteley, Wilfrid (Birm., Ladywood)
Wilson, J. (Oldham)



Motion made, and Question, "That the Clause stand part of the Bill," put, and agreed to.

CLAUSE 2.—(Increased duties and draw- backs on tobacco.)

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Mr. EDE: I oppose this Clause, but I do not intend to inflict an original speech upon the Committee. I will recall the great speech which was delivered in this House, with dramatic effect, by the present Chancellor of the Exchequer, on the 27th April, 1927, when he opposed a similar increase in the Tobacco Duty, proposed by the right hon. Member for Epping (Mr. Churchill). His speech on that occasion was so biting and so concise that he said for all time all that is to be said on this question of an increase in the Tobacco Duty. Therefore, I propose to read the relevant sentences from his speech and to leave them as the case against this Clause. He began by reminding the right hon. Member for Epping of the danger of placing a tax upon tobacco in these days, when women had not only largely increased their consumption of tobacco but had been enfranchised and were in process of being still further enfranchised. He went on to say:
What is the case put forward by my hon. Friends "—
The hon. Member for Bishop Auckland (Mr. Dalton) and others had opposed this increase in the Tobacco Duty—
against this increase of the Tobacco Duty? In the first place, they pointed out that tobacco being, as I think they very properly described it, a poor man's comfort, already bears a very heavy duty indeed. I am not quite sure, but I believe, with the possible exception of the Spirit Duty, tobacco is far more heavily taxed than any other commodity. I did not quite follow some of the figures that were given by my hon. friend who moved the Amendment, in regard to the proportion of the duty to the retail price of the article.
The right hon. Gentleman went on to point out that in the Schedule of the Finance Bill the tax was placed at 11s. 2½d. In the Schedule of the present
Bill the tax has been raised to 12s. The right hon. Gentleman then used a phrase that was quoted all over the country by his supporters. He said:
I do not smoke pipe tobacco, but I understand that tobacco will be retailed at from 10d. to 1s. an ounce. If you take it at 10d., I make it out that something like 17/20ths of the retail price of tobacco is duty. That is to say, when these new duties become operative, out of every 20 puffs of tobacco the working man blows, three are for his own enjoyment and 17 for the Chancellor of the Exchequer. How can a heavy duty like that be justified.
[Interruption.] I am not aware that the right hon. Gentleman has to make serious mathematical calculations with the Chief Whip as to the majority that he is going to get in the Lobby. I have sat on the second bench and heard the Chief Whip talking with the Minister in charge of the House, and I know very well what they talk about on occasion.

The CHAIRMAN: Perhaps the hon. Member will get back to the Motion before the Committee.

Mr. EDE: The two Ministers in charge of this Measure were engaged in conversation with the Chief Whip while I was speaking. I should have thought that ordinary courtesy, especially when an hon. Member is directing his remarks specifically to them, would have meant that, at least, they might pay him the compliment of appearing to attend to him. The right hon. Gentleman said, in 1927, that the smoker took three puffs for his own enjoyment and 17 for the Chancellor of the Exchequer. From now onwards I estimate that he will have three puffs for his own enjoyment and at least 18 for the pleasure of the Chancellor of the Exchequer before he gets another one for his own enjoyment. After asking how a heavy duty like that could be justified, the right hon. Gentleman dealt with another point. The right hon. Member for Epping interrupted him and asked him to justify the same line of argument in regard to beer. After pointing out that beer was bad but that tobacco was good, because the beer was for the solace of somebody else and tobacco was his, he said:
I was dealing with the contention of my hon. Friend that the poor man pays a far larger proportion of the Tobacco Duty than those who can afford the more expensive tobaccos. Another argument is that a tax of this sort penalises a man according to his taste. Because one man happens to have a particular taste, or happens to spend some part of his means in a particular way, he is taxed, when a man who has not got that taste and chooses to spend the same amount of money on some other article which is not taxed, escapes taxation altogether.
I oppose this Clause out of sheer kindness of heart, because I have not smoked for 10 years. It is impossible for me to smoke owing to my having been badly gassed during the War, but there seems to me to be no reason why I should escape taxation and other people should be taxed simply because their taste or their habits cause them to consume this particular commodity. Then the right hon. Gentleman in his peroration said:
I shall be interested to hear the defence of this impost made by hon. Members opposite. I can imagine Members from agricultural constituencies going down and addressing public meetings of farm labourers, who are earning 30s. and 32s. per week"—
That is what they get—
and dilating to these men upon the blessings that are being showered on them by this Tory Government, chief among which

is this increase of ½d. per ounce upon what practically is the only comfort that these working men have. I wish them joy in doing that. We shall, of course, carry this Amendment to a Division. I hardly expect that we shall defeat the Government, but although we shall nut defeat the Government, this action on their part will be one addition to the indictment which they are piling up against themselves, and sentence will be passed upon them when the electors of the country next get an opportunity."—[OFFICIAL REPORT, 27th April, 1927; cols. 859–861, 863, Vol. 205.]

The hon. Member for Central Hackney (Mr. Watkins) drew my attention earlier in the week to the issue of "Punch" of the 1st April, 1931, and having read that speech, with its clear enunciation of policy, a quotation from "Punch" of that date seems to be particularly apt. It was:
Things we have never dared to say. A schoolboy's essay: 'The Prime Minister is generally the First Lord of the Treachery.'

Never was that more apt than now—and in his second in command he has a very good Second Lord.

Question put, "That the Clause stand part of the Bill."

The Committee divided: Ayes, 276; Noes, 216.

Division No. 504.]
AYES.
[5.49 p.m.


Acland-Troyte, Lieut.-Colonel
Buchan, John
Culverwell, C. T. (Bristol, West)


Aitchison, Ht. Hon. Craigie M.
Buchan-Hepburn, P. G. T.
Cunliffe-Lister, Rt. Hon. Sir Philip


Albery, Irving James
Bullock, Captain Malcolm
Dalkeith, Earl of


Alexander, Sir Win. (Glasgow, Cent'l)
Burgin, Dr. E. L.
Dalrymple-White, Lt.-Col, Sir Godfrey


Allen, Sir J. Sandeman (Liverp'l., W.)
Butler, R. A.
Davidson, Rt. Hon. J. (Hertford)


Allen, Lt.-Col. Sir William (Armagh)
Butt, Sir Alfred
Davies, Dr. Vernon


Amery, Rt. Hon. Leopold C. M. S.
Cadogan, Major Hon. Edward
Davies, Maj. Geo. F. (Somerset, Yeovil)


Ashley, Lt.-Col. Rt. Hon. Wilfrid W.
Calne, Hall-, Derwent
Davison, Sir W. H. (Kensington, S.)


Aske, Sir Robert
Campbell, E. T.
Dawson, Sir Philip


Astor, Maj. Hn. John J. (Kent, Dover)
Carver, Major W. H.
Denman, Hon. R. D.


Astor, Viscountess
Castle Stewart, Earl of
Despencer-Robertson, Major J. A. F.


Atholl, Duchess of
Cautley, Sir Henry S
Dixey, A. C.


Atkinson, C.
Cayzer, Sir C. (Chester, City)
Dixon, Captain Rt. Hon. Herbert


Baldwin, Rt. Hon. Stanley (Bewdley)
Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.)
Duckworth, G. A. V.


Balfour, George (Hampstead)
Cecil, Rt. Hon. Lord H. (Ox. Univ.)
Dudgeon, Major C. R.


Balfour, Captain H. H. (I. of Thanet)
Chadwick, Capt. Sir Robert Burton
Dugdale, Capt. T. L.


Balniel, Lord
Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)
Eden, Captain Anthony


Beamish, Rear-Admiral T. p. H.
Chamberlain, Rt. Hon. N. (Edgbaston)
Edge, Sir William


Beaumont, M. W.
Chapman, Sir S.
Edmondson, Major A. J.


Bellairs, Commander Carlyon
Christie, J. A.
Elliot, Major Walter E.


Bennett, Sir E. N. (Cardiff, Central)
Church, Major A. G.
Elmley, viscount


Berry, Sir George
Clydesdale, Marquess of
England, Colonel A.


Betterton, Sir Henry B.
Cobb, Sir Cyril
Erskine, Lord (Somerset, Weston-s.-M.)


Bevan, S. J. (Holborn)
Cockcrill, Brig.-General Sir George
Evans, Capt. Ernest (Welsh Univer.)


Birchall, Major Sir John Dearman
Cohen, Major J. Brunel
Everard, W. Lindsay


Blinded, James
Colfox, Major William Philip
Falle, Sir Bertram G.


Boothby, R. J. G.
Collins, Sir Godfrey (Greenock)
Ferguson, Sir John


Bowater, Col. Sir T. Vansittart
Colville, Major D. J.
Fielden, E. B.


Bowyer, Captain Sir George E. W.
Conway, Sir W. Martin
Fison, F. G. Clavering


Boyce, Leslie
Cooper, A. Duff
Foot, Isaac


Bracken, B.
Courthope, Colonel Sir G. L.
Ford, Sir P. J.


Briscoe, Richard George
Crichton-Stuart, Lord C.
Forestier-Walker, Sir L.


Broadbent, Colonel J.
Cranborne, Viscount
Fremantle, Lieut.-Colonel Francis E.


Brown, Col. D. C. (N'th'l'd., Hexham)
Croft, Brigadler-General Sir H.
Galbraith, J. F. W.


Brown, Ernest (Leith)
Crookshank, Capt. H. C.
Gault, Lieut.-Col. A. Hamilton


Brown, Brig.-Gen. H. C. (Berks, Newb'y)
Croom-Johnson, R. P.
George, Major G. Lloyd (Pembroke)


George, Megan Lloyd (Anglesea)
Locker-Lampson, Com. O. (Handsw'th)
Russell, Alexander West (Tynemouth)


Gillett, George M.
Long, Major Hon. Eric
Russell, Richard John (Eddisbury)


Gilmour, Lt.-Col. Rt. Hon. Sir John
Lovat-Fraser, J. A.
Salmon, Major I.


Glassey, A. E.
Lymington, Viscount
Samuel, A. M. (Surrey, Farnham)


Glyn, Major R. G. C.
McConnell, Sir Joseph
Sandeman, Sir N. Stewart


Graham, Fergus (Cumberland, N.)
MacDonald, Rt. Hon. J. R. (Seaham)
Sassoon, Rt. Hon. Sir Philip A. G. D.


Granville, E.
MacDonald, Malcolm (Bassetlaw)
Savery, S. S.


Grattan-Doyle, Sir N.
Macpherson, Rt. Hon. James I.
Scott, James


Gray, Milner
Macquisten, F. A.
Shakespeare, Geoffrey H.


Greaves-Lord, Sir Walter
Maitland, A. (Kent, Faversham)
Shepperson, Sir Ernest Whittome


Gretton, Colonel Rt. Hon. John
Makins, Brigadier-General E.
Simms, Major-General J.


Griffith, F. Kingsley (Middlesbro' W.)
Margesson, Captain H. D.
Simon, Rt. Hon. Sir John


Gritten, W. G. Howard
Marjoribanks, Edward
Skelton, A. N.


Gunston, Captain D. W.
Markham, S. F.
Smith, Louis W. (Sheffield, Hallam)


H[...]ing, Rt. Hon. Douglas H.
Mason, Colonel Glyn K.
Smith, R. W. (Aberd'n & Kinc'dine, C.)


Hall, Lieut.-Col. Sir F. (Dulwich)
Merriman, Sir F. Boyd
Smith-Carington, Neville W.


Hamilton, Sir George (Ilford)
Millar, J. D.
Smithers, Waldron


Hamilton, Sir R. (Orkney & Zetland)
Milne, Wardlaw-, J. S.
Snowden, Rt. Hon. Philip


Hammersley, S. S.
Mitchell, Sir W. Lane (Streatham)
Somerset, Thomas


Hanbury, C
Monsell, Eyres, Com. Rt. Hon. Sir B
Somerville, A. A. (Windsor)


Hannon, Patrick Joseph Henry
Moore, Lieut.-Colonel T. C. R. (Ayr)
Southby, Commander A. R. J.


Harbord, A.
Morris, Rhys Hopkins
Spender-Clay, Colonel H.


Harris, Percy A.
Morris-Jones, Dr. J. H. (Denbigh)
Stanley, Lord (Fylde)


Hartington, Marquess of
Morrison, W. S. (Glos., Cirencester)
Stanley, Hon. O. (Westmorland)


Harvey, Major S. E. (Devon, Totnes)
Muirhead, A. J.
Stewart, W. J. (Belfast, South)


Haslam, Henry C.
Nall-Cain, A. R. N.
Stuart, Hon. J. (Moray and Nairn)


Henderson, Capt. R. R. (Oxf'd, Henley)
Nathan, Major H. L.
Sueter, Rear-Admiral M. F.


Heneage, Lieut.-Colonel Arthur P.
Newman, Sir R. H. S. D. L. (Exeter)
Thomas, Rt. Hon. J. H. (Derby)


Hennessy, Major Sir G. R. J.
Nicholson, O. (Westminster)
Thomas, Major L. B. (King's Norton)


Hills, Major Rt. Hon. John Waller
Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld)
Thompson, Luke


Hope, Sir Harry (Forfar)
O'Connor, T. J.
Thomson, Mitchell-, Rt. Hon. Sir W.


Hore-Belisha, Leslie
Oliver, P. M. (Man., Blackley)
Titchfield, Major the Marquess of


Horne, Rt. Hon. Sir Robert S.
Ormsby-Gore, Rt. Hon. William
Todd, Capt. A. J.


Howard-Bury, Colonel C. K.
Owen, Major G. (Carnarvon)
Train, J.


Hudson, Capt. A. U. M. (Hackney, N.)
Percy, Lord Eustace (Hastings)
Tryon, Rt. Hon. George Clement


Hurd, Percy A.
Perkins, W. R. D.
Turton, Robert Hugh


Hurst, Sir Gerald B.
Peters, Dr. Sidney John
Wallace, Capt. D. E. (Hornsey)


Hutchison, Maj.-Gen. Sir R.
Peto, Sir Basil E. (Devon, Barnstaple)
Walters, Rt. Hon. Sir J. Tudor


Inskip, Sir Thomas
Power, Sir John Cecil
Ward, Lieut.-Col. Sir A. Lambert


Jones, Llewellyn-, F.
Pownall, Sir Assheton
Warrender, Sir Victor


Jones, Sir G. W. H. (Stoke New'gton)
Purbrick, R.
Waterhouse, Captain Charles


Jones, Henry Haydn (Merioneth)
Pybus, Percy John
Wayland, Sir William A.


Jones, Rt. Hon. Leif (Camborne)
Ramsay, T. B. Wilson
Wells, Sydney R.


Jowitt, Rt. Hon. Sir W. A. (Preston)
Ramsbotham, H.
White, H. G.


Kedward, R. M. (Kent, Ashford)
Rathbone, Eleanor
Williams, Charles (Devon, Torquay)


Kindersley, Major G. M.
Rawson, Sir Cooper
Wilson, G. H. A. (Cambridge U.)


Knight, Holford
Reid, David D. (County Down)
Windsor-Clive, Lieut.-Colonel George


Knox, Sir Alfred
Remer, John R.
Winterton, Rt. Hon. Earl


Lamb, Sir J. O.
Rentoul, Sir Gervals S.
Withers, Sir John James


Lambert, Rt. Hon. George (S. Molton)
Rhys, Hon. C. A. U.
Womersley, W. J.


Lane Fox, Col. Rt. Hon. George R.
Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Wood, Rt. Hon. Sir Kingsley


Latham, H. P. (Scarboro' & Whitby)
Roberts, Sir Samuel (Ecclesall)
Wood, Major McKenzie (Banff)


Law, Sir Alfred (Derby, High Peak)
Robinson, Sir T. (Lancs, Stretford)
Wright, Brig.-Gen. W. D. (Tavist'k)


Leighton, Major B. E. P.
Rodd, Rt. Hon. Sir James Rennell
Young, Rt. Hon. Sir Hilton


Lewis, Oswald (Colchester)
Rosbotham, D. S. T.



Llewellin, Major J. J.
Rothschild, J. de
TELLERS FOR THE AYES.—


Locker-Lampson, Rt. Hon. Godfrey
Ruggles-Brise, Colonel E.
Sir Frederick Thomson and Sir




George Penny.


NOES.


Adamson, Rt. Hon. W. (Fife, West)
Brown, W. J. (Wolverhampton, West)
Edmunds, J. E.


Adamson, W. M. (Staff., Cannock)
Buchanan, G.
Edwards, E. (Morpeth)


Alexander, Rt. Hon. A. V. (Hillsbro')
Burgess, F. G.
Egan, W. H.


Alpass, J. H.
Buxton, C. R. (Yorks. W. R. Elland)
Forgan, Dr. Robert


Ammon, Charles George
Cameron, A. G.
Freeman, Peter


Arnott, John
Cape, Thomas
Gardner, B. W. (West Ham, Upton)


Attlee, Clement Richard
Carter, W. (St. Pancras, S.W.)
Gardner, J. P. (Hammersmith, N.)


Ayles, Walter
Charleton, H. C.
Gibbins, Joseph


Baker, John (Wolverhampton, Bilston)
Chater, Daniel
Gill, T. H.


Baldwin, Oliver (Dudley)
Clarke, J. S.
Gossling, A. G.


Barnes, Alfred John
Clynes, Rt. Hon. John R.
Gould, F.


Barr, James
Cocks, Frederick Seymour
Graham, D. M. (Lanark, Hamilton)


Batey, Joseph
Compton, Joseph
Graham, Rt. Hon. Wm. (Edin., Cent.)


Bennett, William (Battersea, South)
Cove, William G.
Greenwood, Rt. Hon. A. (Colne)


Benson, G.
Cripps, Sir Stafford
Grenfell, D. R. (Glamorgan)


Bowen, J. W.
Daggar, George
Griffiths, T. (Monmouth, Pontypool)


Bowerman, Rt. Hon. Charles W.
Dallas, George
Groves, Thomas E.


Broad, Francis Alfred
Dalton, Hugh
Grundy, Thomas W.


Brockway, A. Fenner
Davies, D. L. (Pontypridd)
Hall, F. (York, W.R., Normanton)


Bromfield, William
Davies, Rhys John (Westhoughton)
Hall, G. H. (Merthyr Tydvil)


Bromley, J.
Day, Harry
Hall, J. H. (Whitechapel)


Brooke, W.
Dukes, C.
Hall, Capt. W. G. (Portsmouth, C.)


Brothers, M.
Duncan, Charles
Hamilton, Mary Agnes (Blackburn)


Brown, Rt. Hon. J. (South Ayrshire)
Ede, James Chuter
Hardie, David (Rutherglen)




Hardie, G. D. (Springburn)
Marcus, M.
Sinkinson, George


Hastings, Dr. Somerville
Marley, J.
Sitch, Charles H.


Hayes, John Henry
Marshall, Fred
Smith, Ben (Bermondsey, Rotherhithe)


Henderson, Arthur, Junr. (Cardiff, S.)
Mathers, George
Smith, Frank (Nuneaton)


Henderson, Joseph (Ardwick)
Maxton, James
Smith, Tom (Pontefract)


Henderson, Thomas (Glasgow)
Messer, Fred
Snowden, Thomas (Accrington)


Henderson, W, W. (Middx., Enfield)
Middleton, G.
Sorensen, R.


Herriotts, J.
Mills, J. E.
Stamford, Thomas W.


Hicks, Ernest George
Milner, Major J.
Stephen, Campbell


Hirst, G. H. (York W. R. Wentworth)
Montague, Frederick
Strachey, E. J. St. Loe


Hirst, W. (Bradford, South)
Morgan, Dr. H. B.
Strauss, G. R.


Hoffman, P. C.
Morley, Ralph
Sullivan, J.


Hollins, A.
Mort, D. L.
Sutton, J. E.


Hopkin, Daniel
Muggeridge, H. T.
Taylor, R. A. (Lincoln)


Horrabin, J, F.
Murnin, Hugh
Thorne, W. (West Ham, Plaistow)


Isaacs, George
Naylor, T. E.
Thurtle, Ernest


Jenkins, Sir William
Noel-Burton, Baroness (Norfolk, N.)
Tillett, Ben


John, William (Rhondda, West)
Oldfield, J. R.
Tinker, John Joseph


Jones, J. J. (West Ham, Silvertown)
Oliver, George Harold (Ilkeston)
Toole, Joseph


Jones, Morgan (Caerphilly)
Palin, John Henry
Tout, W. J.


Jowett, Rt. Hon. F. W.
Paling, Wilfrid
Turner, Sir Ben


Kelly, W. T.
Palmer, E. T.
Vaughan, David


Kennedy, Rt. Hon. Thomas
Parkinson, John Allen (Wigan)
Viant, S. P.


Kenworthy, Lt.-Com. Hon. Joseph M.
Perry, S. F.
walkden, A. G.


Kinley, J.
Pethick-Lawrence, F. W.
Walker, J.


Kirkwood, D.
Phillips, Dr. Marlon
Wallace, H. W.


Lansbury, Rt. Hon. George
Pole, Major D. G.
Watkins, F. C.


Lathan, G. (Sheffield, Park)
Potts, John S.
Watson, W. M. (Dunfermline)


Law, A. (Rossendale)
Price, M. P.
Watts-Morgan, Lt.-Col. D. (Rhondda)


Lawrence, Susan
Quibell, D. J. K.
Wedgwood, Rt. Hon. Joslah


Lawrie, Hugh Hartley (Stalybridge)
Raynes, W. R.
Wellock, Wilfred


Lawson, John James
Richards, R.
Welsh, James (Paisley)


Lawther, W. (Barnard Castle)
Richardson, R. (Houghton-le-Spring)
Welsh, James C. (Coatbridge)


Leach, W.
Riley, Ben (Dewsbury)
West, F. R.


Lee, Frank (Derby, N.E.)
Riley, F. F. (Stockton-on-Tees)
Westwood, Joseph


Leonard, W.
Ritson, J.
Whiteley, Wilfrid (Birm., Ladywood)


Lewis, T. (Southampton)
Romeril, H. G.
Wilkinson, Ellen C.


Logan, David Gilbert
Rowson, Guy
Williams, David (Swansea, East)


Longbottom, A. W.
Salter, Dr. Alfred
Williams, E. J. (Ogmore)


Longden, F.
Samuel, H. Walter (Swansea, West)
Williams Dr. J. H (Llanelly)


Lunn, William
Sawyer, G. F.
Wilson, C. H. (Sheffield, Attercliffe)


Macdonald, Gordon (Ince)
Scrymgeour, E.
Wilson, J. (Oldham)


McElwee, A.
Sexton, Sir James
Wilson, R. J. (Jarrow)


McKinlay, A.
Shepherd, Arthur Lewis
Wise, E. F.


MacLaren, Andrew
Shield, George William
Young, R. S. (Islington, North)


Maclean, Neil (Glasgow, Govan)
Shillaker, J F.
Young, Sir R. (Lancaster, Newton)


MacNeill-Weir, L.
Shinwell, E.



Mansfield, W.
Short, Alfred (Wednesbury)
TELLERS FOR THE NOES.—


March, S.
Simmons, C. J.
Mr. Charles Edwards and Mr.




William Whiteley.

CLAUSE 3.—(Increase of Customs duty on hydrocarbon oils.)

Mr. ARNOTT: I beg to move, in page 3, line 37, after the word "oils," to insert the words "other than turpentine."
Every Member of this House has voted for this Amendment at one time or another. The Chancellor of the Exchequer himself moved a similar Amendment in the clays gone by, and when the duty was only 2d. Hon. Members opposite supported a similar Amendment in the earlier part of this year. Therefore, every hon. Member in the House will support this Amendment, at least that is what one would expect. The duty on white spirit at the present moment is 100 per cent. and the duty

on turpentine has been quadrupled since the Chancellor of the Exchequer first opposed it. Every argument that had been urged before against this duty can be urged with even greater force tonight.

Lieut.-Colonel Sir FREDERICK HALL: I am entirely opposed to—

It being Six of the Clock, the CHAIRMAN proceeded, pursuant to the order of the House of the 22nd September, to put forthwith the Question on the Amendment already proposed from the Chair.

Question put, "That those words be there inserted."

The Committee divided: Ayes, 216; Noes, 278.

Division No. 505.]
AYES.
[6.0 p.m.


Adamson, Rt. Hon. W. (Fife, West)
Ammon, Charles George
Baker, John (Wolverhampton, Bliston)


Adamson, W. M. (Staff., Cannock)
Arnott, John
Baldwin, Oliver (Dudley)


Alexander, Rt. Hon. A. V. (Hillsbro')
Attlee, Clement Richard
Barnes, Alfred John


Alpass, J. H.
Ayles, Walter
Barr, James


Batey, Joseph
Hirst, W. (Bradford, South)
Richards, R.


Bennett, William (Battersea, South)
Hoffman, p. C.
Richardson, R. (Houghton-le-Spring)


Benson, G.
Hollins, A.
Riley, Ben (Dewsbury)


Bowen, J. W.
Hopkin, Daniel
Riley, F. F. (Stockton-on-Tees)


Bowerman, Rt. Hon. Charles W.
Horrabin, J. F.
Ritson, J.


Broad, Francis Alfred
Jenkins, Sir William
Romeril, H. G.


Brockway, A. Fenner
John, William (Rhondda, West)
Rowson, Guy


Bromfield, William
Jones, J. J. (West Ham, Silvertown)
Salter, Dr. Alfred


Bromley, J.
Jones, Morgan (Caerphilly)
Samuel, H. Walter (Swansea, West)


Brooke, W.
Jowett, Rt. Hon. F. W.
Sawyer, G. F.


Brothers, M.
Kelly, W. T.
Scrymgeour, E.


Brown, Rt. Hon. J. (South Ayrshire)
Kennedy, Rt. Hon. Thomas
Sexton, Sir James


Brown, W. J. (Wolverhampton, West)
Kenworthy, Lt.-Com. Hon. Joseph M
Shepherd, Arthur Lewis


Buchanan, G.
Kirkwood, D.
Shield, George William


Burgess, F. G.
Lansbury, Rt. Hon, George
Shiels, Dr. Drummond


Buxton, C. R. (Yorks. W. R. Elland)
Lathan, G. (Sheffield, Park)
Shillaker, J. F.


Cameron, A. G.
Law, Albert (Bolton)
Shinwell, E.


Cape, Thomas
Law, A. (Rossendale)
Short, Alfred (Wednesbury)


Carter, W. (St. Pancras, S.W.)
Lawrence, Susan
Simmons, C. J.


Chater, Daniel
Lawrie, Hugh Hartley (Stalybridge)
Sinkinson, George


Clarke, J. S.
Lawson, John James
Sitch, Charles H.


Cluse, W. S.
Lawther, W. (Barnard Castle)
Smith, Ben (Bermondsey, Rotherhithe)


Clynes, Rt. Hon. John R.
Leach, W.
Smith, Frank (Nuneaton)


Cocks, Frederick Seymour
Lee, Frank (Derby, N.E.)
Smith, Tom (Pontefract)


Compton, Joseph
Leonard, W.
Snowden, Thomas (Accrington)


Cove, William G.
Lewis, T. (Southampton)
Sorensen, R.


Cripps, Sir Stafford
Logan, David Gilbert
Stamford, Thomas W.


Daggar, George
Longbottom, A. W.
Stephen, Campbell


Dallas, George
Longden, F.
Strachey, E. J. St. Loe


Dalton, Hugh
Lunn, William
Strauss, G. R.


Davies, D. L. (Pontypridd)
Macdonald, Gordon (Ince)
Sullivan, J.


Davies, Rhys John (Westhoughton)
McElwee, A.
Sutton, J. E


Day, Harry
McKinlay, A.
Taylor, R. A. (Lincoln)


Dukes, C.
MacLaren, Andrew
Thorne, W. (West Ham, Plaistow)


Duncan, Charles
Maclean, Neil (Glasgow, Govan)
Thurtle, Ernest


Ede, James Chuter
MacNeill-Weir, L.
Tillett, Ben


Edmunds, J. E.
Mansfield, W.
Tinker, John Joseph


Edwards, E. (Morpeth)
March, S.
Toole, Joseph


Egan, W. H.
Marcus, M.
Tout, W. J.


Freeman, Peter
Marley, J.
Townend, A. E


Gardner, B. W. (West Ham, Upton)
Marshall, Fred
Turner, Sir Ben


Gardner, J. P. (Hammersmith, N.)
Mathers, George
Vaughan, David


Gibbins, Joseph
Maxton, James
Viant, S. P.


Gill, T. H.
Messer, Fred
Walkden, A. G.


Gossling, A. G.
Middleton, G.
Walker, J.


Gould, F.
Mills, J. E.
Wallace, H. W.


Graham, D. M. (Lanark, Hamilton)
Milner, Major J.
Watkins, F. C.


Graham, Rt. Hon. Wm. (Edin., Cent.)
Montague, Frederick
Watson, W. M. (Dunfermline)


Greenwood, Rt. Hon. A. (Colne)
Morgan, Dr. H. B.
Watts-Morgan, Lt.-Col. D. (Rhondda)


Grenfell, D. R. (Glamorgan)
Morley, Ralph
Wellock, Wilfred


Griffiths, T. (Monmouth, Pontypool)
Mort, D. L.
Welsh, James (Paisley)


Groves, Thomas E.
Muggeridge, H. T.
Welsh, James C. (Coatbridge)


Grundy, Thomas W.
Murnin, Hugh
West, F. R.


Hall, F. (York, W.R., Normanton)
Naylor, T. E.
Westwood, Joseph


Hall, G. H. (Merthyr Tydvil)
Noel-Buxton, Baroness (Norfolk, N.)
Whiteley, Wilfrid (Birm., Ladywood)


Hall, J. H. (Whitechapel)
Oldfield, J. R.
Whiteley, William (Blaydon)


Hall, Capt. W. G. (Portsmouth, C.)
Oliver, George Harold (Ilkeston)
Wilkinson, Ellen C.


Hamilton, Mary Agnes (Blackburn)
Owen, H. F. (Hereford)
Williams, David (Swansea, East)


Hardie, David (Rutherglen)
Palln, John Henry.
Williams, E. J. (Ogmore)


Hardie, G. D. (Springburn)
Paling, Wilfrid
Williams, Dr. J. H. (Llanelly)


Hastings, Dr. Somerville
Palmer, E. T.
Wilson, C. H. (Sheffield, Attercliffe)


Hayes, John Henry
Parkinson, John Allen (Wigan)
Wilson, J. (Oldham)


Henderson, Rt. Hon. A. (Burnley)
Perry, S. F.
Wilson, R. J. (Jarrow)


Henderson, Arthur, Junr. (Cardiff, S.)
Pethick-Lawrence, F. W.
Young, R. S. (Islington, North)


Henderson, Joseph (Ardwick)
Phillips, Dr. Marion
Young, Sir R. (Lancaster, Newton)


Henderson, Thomas (Glasgow)
Pole, Major D. G.



Henderson, W. W. (Middx., Enfield)
Potts, John S.
TELLERS FOR THE AYES.—


Herriotts, J.
Price, M. P.
Mr. Charles Edwards and Mr.


Hicks, Ernest George
Quibell, D. J. K.
Charleton.


Hirst, G. H. (York, W. R., Wentworth)
Raynes, W. R.



NOES.


Acland-Troyte, Lieut.-Colonel
Atholl, Duchess of
Betterton, Sir Henry B.


Aitchison, Rt. Hon. Craigie M.
Atkinson, C.
Bevan, S. J. (Holborn)


Albery, Irving James
Baldwin, Rt. Hon. Stanley (Bewdley)
Birchall, Major Sir John Dearman


Alexander, Sir Wm. (Glasgow, Cent'l)
Balfour, George (Hampstead)
Blindell, James


Allen, Sir J. Sandeman (Liverp'l., W.)
Balfour, Captain H. H. (I. of Thanet)
Boothby, R. J. G.


Allen, Lt.-Col. Sir William (Armagh)
Balniel, Lord
Bowater, Col. Sir T. Vansittart


Amery, Rt. Hon. Leopold C. M. S.
Beamish, Rear-Admiral T. P. H.
Bowyer, Captain Sir George E. W.


Ashley, Lt.-Col. Rt. Hon. Wilfrid W.
Beaumont, M. W.
Boyce, Leslie


Aske, Sir Robert
Bellairs, Commander Carlyon
Bracken, B.


Astor, Maj. Hn. John J. (Kent, Dover)
Bennett, Sir E. N. (Cardiff, Central)
Briscoe, Richard George


Astor, Viscountess
Berry, Sir George
Broadbent, Colonel J.




Brown, Col. D. C. (N'th'l'd'., Hexham)
Greaves-Lord, Sir Walter
Perkins, W. R. D.


Brown, Ernest (Leith)
Gretton, Colonel Rt. Hon. John
Peters, Dr. Sidney John


Brown, Brig.-Gen. H. C. (Berks, Newb'y)
Griffith, F. Kingsley (Middlesbro' W.)
Peto, Sir Basil E. (Devon, Barnstaple)


Buchan, John
Gritten, W. G. Howard
Power, Sir John Cecil


Buchan-Hepburn, P. G. T.
Gunston, Captain D. W.
Pownall, Sir Assheton


Bullock, Captain Malcolm
Hacking, Rt. Hon. Douglas H.
Purbrick, R.


Burgin, Dr. E. L.
Hall, Lieut.-Col. Sir F. (Dulwich)
Pybus, Percy John


Butler, R. A.
Hamilton, Sir George (Ilford)
Ramsay, T. B. Wilson


Butt, Sir Alfred
Hamilton, Sir R. (Orkney & Zetland)
Ramsbotham, H.


Cadogan, Major Hon. Edward
Hammersley, S. S.
Rathbone, Eleanor


Caine, Hall-, Derwent
Hanbury, C.
Rawson, Sir Cooper


Campbell, E. T.
Hannon, Patrick Joseph Henry
Reid, David D. (County Down)


Carver, Major W. H.
Harbord, A.
Remer, John R.


Castle Stewart, Earl of
Harris, Percy A.
Rentoul, Sir Gervais S.


Cautley, Sir Henry S.
Hartington, Marquess of
Rhys, Hon. C. A. U.


Cayzer, Sir C. (Chester, City)
Harvey, Major S. E. (Devon, Totnes)
Richardson, sir P. W. (Sur'y, Ch'ts'y)


Cayzer, Maj. Sir Herbt, R. (Prtsmth, S.)
Haslam, Henry C.
Roberts, Sir Samuel (Ecclesall)


Cecil, Rt. Hon. Lord H. (Ox. Univ.)
Henderson, Capt. R. R. (Oxf'd, Henley)
Robinson, Sir T. (Lancs, Stretford)


Chadwick, Capt. Sir Robert Burton
Heneage, Lieut.-Colonel Arthur P.
Rodd, Rt. Hon. Sir James Rennell


Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)
Hennessy, Major Sir G. R. J.
Rosbotham, D. S. T.


Chamberlain, Rt. Hon. N. (Edgbaston)
Hills, Major Rt. Hon. John Waller
Rothschild, J. de


Chapman, Sir S.
Hope, Sir Harry (Forfar)
Ruggles-Brise, Colonel E.


Christie, J. A.
Horne, Rt. Hon. Sir Robert S.
Runciman, Rt. Hon. Walter


Church, Major A. G.
Howard-Bury, Colonel C. K.
Russell, Alexander West (Tynemouth)


Clydesdale, Marquess of
Hudson, Capt. A. U. M. (Hackney, N.)
Russell, Richard John (Eddlsbury)


Cobb, Sir Cyril
Hurd, Percy A.
Salmon, Major I.


Cockerill, Brig.-General Sir George
Hurst, Sir Gerald B.
Samuel, A. M. (Surrey, Farnham)


Cohen, Major J. Brunel
Hutchison, Maj.-Gen. Sir R.
Samuel, Samuel (W'dsworth, Putney)


Colfox, Major William Philip
Inskip Sir Thomas
Sandeman, Sir N. Stewart


Collins, Sir Godfrey (Greenock)
Iveagh, Countess of
Sassoon, Rt. Hon. Sir Philip A. G. D.


Colman, N. C. D.
Jones, Llewellyn-, F.
Savery, S. S.


Colville, Major D. J.
Jones, Sir G. W. H. (Stoke New'gton)
Scott, James


Conway, Sir W. Martin
Jones, Henry Haydn (Merioneth)
Shakespeare, Geoffrey H.


Cooper, A. Duff
Jones, Rt. Hon. Leif (Camborne)
Shepperson, Sir Ernest Whittome


Courthope, Colonel Sir G. L.
Kedward, R. M. (Kent, Ashford)
Simms, Major-General J.


Cranborne, Viscount
Kindersley, Major G. M.
Simon, Rt. Hon. Sir John


Crichton-Stuart, Lord C.
Knight, Holford
Skelton, A. N.


Croft, Brigadier-General Sir H.
Knox, Sir Alfred
Smith, Louis W. (Sheffield, Hallam)


Crookshank, Capt. H. C.
Lamb, Sir J. Q.
Smith, R. W.(Aberd'n & Kinc'dine, C.)


Croom-Johnson, R. P.
Lambert, Rt. Hon. George (S. Molton)
Smith-Carington, Neville W.


Culverwell, C. T. (Bristol, West)
Lane Fox, Col. Rt. Hon. George R.
Smithers, Waldron


Cunliffe-Lister, Rt. Hon. Sir Philip
Latham, H. P. (Scarboro' & Whitby)
Snowden, Rt. Hon. Philip


Dalkeith, Earl of
Law, Sir Alfred (Derby, High Peak)
Somerset, Thomas


Dalrymple-White, Lt.-Col. Sir Godfrey
Leighton, Major B. E. P.
Somerville, A. A. (Windsor)


Davidson, Rt. Hon. J. (Hertford]
Lewis, Oswald (Colchester)
Southby, Commander A. R. J.


Davies, Dr. Vernon
Llewellin, Major J. J.
Spender-Clay, Colonel H.


Davies, E. C. (Montgomery)
Locker-Lampson, Rt. Hon. Godfrey
Stanley, Lord (Fylde)


Davies, Maj. Geo. F. (Somerset, Yeovil)
Locker-Lampson, Com. O. (Handsw'th)
Stanley, Hon. O. (Westmorland)


Davison, sir W. H. (Kensington, S.)
Long, Major Hon. Eric
Steel-Maitland, Rt. Hon. Sir Arthur


Dawson, Sir Philip
Lovat-Fraser, J. A.
Stewart, W. J. (Belfast South)


Despencer-Robertson, Major J. A. F.
Lymington, Viscount
Stuart, Hon. J. (Moray and Nairn)


Dixey, A. C.
McConnell, Sir Joseph
Sueter, Rear-Admiral M. F.


Dixon, Captain Rt. Hon. Herbert
MacDonald, Rt. Hon, J, R. (Seaham)
Thomas, Rt. Hon. J. H. (Derby)


Duckworth, G. A. V.
MacDonald, Malcolm (Bassetlaw)
Thomas, Major L. B. (King's Norton)


Dugdale, Capt. T. L.
Macpherson, Rt. Hon. James I.
Thompson, Luke


Dudgeon, Major C. R.
Macquisten, F. A.
Thomson, Sir F.


Eden, Captain Anthony
Maitland, A. (Kent, Faversham)
Thomson, Mitchell-, Rt. Hon. Sir W.


Edge, Sir William
Makins, Brigadier-General E.
Titchfield, Major the Marquess of


Edmondson, Major A. J.
Margesson, Captain H. D.
Todd, Capt. A. J.


Elliot, Major Walter E.
Marjoribanks, Edward
Train, J.


England, Colonel A.
Mason, Colonel Glyn K.
Tryon, Rt. Hon. George Clement


Erskine, Lord (Somerset, Weston-s. M.)
Merriman, Sir F. Boyd
Turton, Robert Hugh


Evans, Capt. Ernest (Welsh Univer)
Millar, J. D.
Walters, Rt. Hon. Sir J. Tudor


Everard, W. Lindsay
Milne, Wardlaw-, J. S.
ward, Lieut.-Col. Sir A. Lambert


Falle, Sir Bertram G.
Mitchell, Sir W. Lane (Streatham)
Warrender, Sir Victor


Ferguson, Sir John
Monsell, Eyres, Com. Rt. Hon. Sir B.
Waterhouse, Captain Charles


Fielden, E. B.
Moore, Lieut.-Colonel T. C. R. (Ayr)
Wayland, Sir William A.


Fison, F. G. Clavering
Morris, Rhys Hopkins
Wells, Sydney H.


Foot, Isaac
Morris-Jones, Dr. J. H. (Denbigh)
White, H. G.


Ford, Sir P. J.
Morrison, W. S. (Glos., Cirencester)
Williams, Charles (Devon, Torquay)


Forestier-Walker, Sir L.
Muirhead, A. J.
Wilson, G. H. A. (Cambridge U.)


Fremantle, Lieut.-Colonel Francis E.
Nail-Cain, A. R. N.
Windsor-Clive, Lieut.-Colonel George


Galbraith, J. F. W.
Nathan, Major H. L.
Winterton, Rt. Hon. Earl


Gault, Lieut.-Col. A. Hamilton
Newman, Sir R. H. S. D. L. (Exeter)
Withers, Sir John James


George, Major G. Lloyd (Pembroke)
Newton, Sir D. G. C. (Cambridge)
Womersley, W. J.


George, Megan Lloyd (Anglesea)
Nicholson, O. (Westminster)
Wood, Rt. Hon. Sir Kingsley


Gillett, George M.
Nicholson, Col. Rt. Hn. W. G. (Ptrst'ld)
Wood, Major McKenzie (Banff)


Gilmour, Lt.-Col. Rt. Hon. Sir John
O'Connor, T. J.
Wright, Brig.-Gen. W. D. (Tavist'k)


Glassey, A. E.
Oliver, P. M. (Man., Blackley)
Young, Rt. Hon. Sir Hilton


Graham, Fergus (Cumberland, N.)
Ormsby-Gore, Rt. Hon. William



Granville, E.
Owen, Major G. (Carnarvon)
TELLERS FOR THE NOES.—


Grattan-Doyle, Sir N.
Penny, Sir George
Captain Wallace and Viscount


Gray, Milner
Percy, Lord Eustace (Hastings)
Elmley.


Question, "That the Clause stand part of the Bill," put, and agreed to.

The CHAIRMAN then proceeded successively to put forthwith the Question on an Amendment moved by the Government of which notice had been given, and the Questions necessary to dispose of the business to be concluded at Six of the Clock at this day's Sitting.

Clause 4 (Prohibition on mixing of hydrocarbon oils on which rebate allowed, with light oils), ordered to stand part of the Bill.

CLAUSE 5.—(Increased rate of entertain- ments duty and relief from duty on entertainments for children.)

Amendment made: In page 4, line 30, leave out Sub-section (2).—[Mr. P. Snowden.]

Motion made, and Question put, "That the Clause, as amended, stand part of the Bill."

The Committee divided: Ayes, 286; Noes, 219.

Division No. 506.]
AYES.
[6.11 p.m.


Acland-Troyte, Lieut.-Colonel
Colman, N. C. D.
Hall, Lieut.-Col. Sir F. (Dulwich)


Aitchison, Rt. Hon. Craigie M.
Colville, Major D. J.
Hamilton, Sir George (Ilford)


Albery, Irving James
Conway, Sir W. Martin
Hamilton, Sir R. (Orkney & Zetland)


Alexander, Sir Wm. (Glasgow, Cent'l)
Cooper, A. Duff
Hammersley, S. S.


Allen, Sir J. Sandeman (Liverp'l., W.)
Courthope, Colonel Sir G. L.
Hanbury, C.


Allen, Lt.-Col. Sir William (Armagh)
Cowan, D. M.
Hannon, Patrick Joseph Henry


Amery, Rt. Hon. Leopold C. M. S.
Crichton-Stuart, Lord C.
Harbord, A.


Ashley, Lt.-Col. Rt. Hon. Wilfrid W.
Cranborne, Viscount
Harris, Percy A.


Aske, Sir Robert
Croft, Brigadier-General Sir H.
Hartington, Marquess of


Astor, Maj. Hn. John J. (Kent, Dover)
Crookshank, Capt. H. C.
Harvey, Major S. E. (Devon, Totnes)


Astor, Viscountess
Croom-Johnson, R. P.
Haslam, Henry C.


Atholl, Duchess of
Culverwell, C. T. (Bristol, West)
Henderson, Capt. R. R.(Oxf'd, Henley}


Atkinson, C.
Cunliffe-Lister, Rt. Hon. Sir Philip
Heneage, Lieut.-Colonel Arthur P.


Baldwin, Rt. Hon. Stanley (Bewdley)
Dalkeith, Earl of
Hennessy, Major Sir G. R. J.


Balfour, George (Hampstead)
Dalrymple-White, Lt.-Col. Sir Godfrey
Hills, Major Rt. Hon. John Waller


Balfour, Captain H. H. (I. of Thanet)
Davidson, Rt. Hon. J. (Hertford)
Hope, Sir Harry (Forfar)


Balniel, Lord
Davies, Dr. Vernon
Horne, Rt. Hon. Sir Robert S.


Beamish, Rear-Admiral T. P. H.
Davies, E. C. (Montgomery)
Howard-Bury, Colonel C. K.


Beaumont, M. W.
Davies, Maj. Geo. F.(Somerset, Yeovil)
Hudson, Capt. A. U. M. (Hackney, N.)


Bellairs, Commander Carlyon
Davison, Sir W. H. (Kensington, S.)
Hunter, Dr. Joseph


Bennett, Sir E. N. (Cardiff, Central)
Dawson, Sir Philip
Hurd, Percy A.


Berry, Sir George
Denman, Hon. R. D.
Hurst, Sir Gerald B.


Betterton, Sir Henry B.
Despencer-Robertson, Major J. A. F.
Hutchison, Maj.-Gen. Sir R.


Bevan, S. J. (Holborn)
Dixey, A. C.
Inskip, Sir Thomas


Birchall, Major Sir John Dearman
Dixon, Captain Rt. Hon. Herbert
Iveagh, Countess of


Blindell, James
Duckworth, G. A. V.
Jones, Llewellyn-, F.


Boothby, R. J. G.
Dudgeon, Major C. R.
Jones, Sir G. W. H. (Stoke New'gton)


Bowater, Col. Sir T. Vansittart
Dugdale, Capt. T. L.
Jones, Henry Haydn (Merioneth)


Bowyer, Captain Sir George E. W.
Eden, Captain Anthony
Jones, Rt. Hon. Leif (Camborne)


Boyce, Leslie
Edge, Sir William
Kedward, R. M. (Kent, Ashford)


Bracken, B.
Edmondson, Major A. J.
Kindersley, Major G. M.


Briscoe, Richard George
Elliot, Major Walter E.
Knight, Holford


Broadbent, Colonel J.
Elmley, Viscount
Knox, Sir Alfred


Brown, Col. D. C. (N'th'l'd., Hexham)
England, Colonel A.
Lamb, Sir J. Q.


Brown, Ernest (Leith)
Erskine, Lord (Somerset, Weston-s-M.)
Lambert, Rt. Hon. George (S. Molton)


Brown, Brig.-Gen. H. C. (Berks, Newb'y)
Evans, Capt. Ernest (Welsh Univer)
Lane Fox, Col. Rt. Hon. George R.


Buchan, John
Everard, W. Lindsay
Latham, H. P. (Scarboro' & Whitby)


Buchan-Hepburn, P. G. T.
Falle, Sir Bertram G.
Law, Sir Alfred (Derby, High Peak)


Bullock, Captain Malcolm
Ferguson, Sir John
Leighton, Major B. E. P.


Burgin, Dr. E. L.
Fielden, E. B.
Lewis, Oswald (Colchester)


Butler, R. A.
Fison, F. G. Clavering
Llewellin, Major J. J.


Butt, Sir Alfred
Foot, Isaac,
Locker-Lampson, Rt. Hon. Godfrey


Cadogan, Major Hon. Edward
Ford, Sir P. J.
Locker-Lampson, Com. O. (Handsw'th)


Caine, Hall-, Derwent
Forestier-Walker, Sir L.
Long, Major Hon. Erie


Campbell, E. T.
Fremantle, Lieut.-Colonel Francis E.
Lovat-Fraser, J. A.


Carver, Major W. H.
Galbraith, J. F. W.
Lymington, Viscount


Castle Stewart, Earl of
Gault, Lieut.-Col. A. Hamilton
McConnell, Sir Joseph


Cautley, Sir Henry S.
George, Major G. Lloyd (Pembroke)
MacDonald, Rt. Hon. J. R. (Seaham)


Cayzer, Sir C. (Chester, City)
George, Megan Lloyd (Anglesea)
MacDonald, Malcolm (Bassetlaw)


Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.)
Gillett, George M.
Macdonald, Sir M. (Inverness)


Cecil, Rt. Hon. Lord H. (Ox. Univ.)
Gilmour, Lt.-Col. Rt. Hon. Sir John
Macdonald, Capt. P. D. (I. of W.)


Chadwick, Capt. Sir Robert Burton
Glassey, A. E.
Macpherson, Rt. Hon. James I.


Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)
Glyn, Major R. G. C.
Macquisten, F. A.


Chamberlain, Rt. Hon. N. (Edgbaston)
Graham, Fergus (Cumberland, N.)
Maitland, A. (Kent, Faversham)


Chapman, Sir S.
Granville, E.
Makins, Brigadier-General E.


Christie, J. A.
Grattan-Doyle, Sir N.
Margesson, Captain H. D.


Church, Major A. G.
Gray, Milner
Marjoribanks, Edward


Clydesdale, Marquess of
Greaves-Lord, Sir Walter
Markham, S. F.


Cobb, Sir Cyril
Gretton, Colonel Rt. Hon. John
Mason, Colonel Glyn K.


Cockerill, Brig.-General Sir George
Griffith, F. Kingsley (Middlesbro' W.)
Merriman, Sir F. Boyd


Cohen, Major J. Brunel
Gritten, W. G. Howard
Millar, J. D.


Colfox, Major William Philip
Gunston, Captain D. W.
Milne, Wardlaw-, J. S.


Collins, Sir Godfrey (Greenock)
Hacking, Rt. Hon. Douglas H.
Mitchell, Sir W. Lane (Streatham)


Monsell, Eyres, Com. Rt. Hon. Sir B.
Roberts, Sir Samuel (Ecclesall)
Stuart, Hon. J. (Moray and Nairn)


Moore, Lieut.-Colonel T, C. R. (Ayr)
Robinson, Sir T. (Lancs, Stretford)
Sueter, Rear-Admiral M. F.


Morris, Rhys Hopkins
Rodd, Rt. Hon, Sir James Rennell
Thomas, Rt. Hon. J. H. (Derby)


Morris-Jones, Dr. J. H. (Denbigh)
Rosbotham, D. S. T.
Thomas, Major L. B. (King's Norton)


Morrison, W. S. (Glos., Cirencester)
Rothschild, J. de
Thompson, Luke


Muirhead, A. J.
Ruggles-Brise, Colonel E.
Thomson, Sir F.


Nail-Cain, A. R. N.
Runciman, Rt. Hon. Walter
Thomson, Mitchell-, Rt. Hon. Sir W.


Nathan, Major H. L.
Russell, Alexander West (Tynemouth)
Titchfield, Major the Marquess of


Newman, Sir R. H. S. D. L. (Exster)
Russell, Richard John (Eddisbury)
Todd, Capt. A. J.


Newton, Sir D. G. C. (Cambridge)
Salmon, Major I.
Train, J.


Nicholson, O. (Westminster)
Samuel, A. M. (Surrey, Farnham)
Tryon, Rt. Hon. George Clement


Nicholson, Col. Rt. Hn. W. G. (Ptsf'ld)
Samuel, Samuel (W'dsworth, Putney)
Turton, Robert Hugh


O'Connor, T. J.
Sandeman, Sir N. Stewart
Vaughan-Morgan, Sir Kenyon


Oliver, P. M. (Man., Blackley)
Sassoon, Rt. Hon. Sir Philip A. G. D.
Walters, Rt. Hon. sir J. Tudor


Ormsby-Gore, Rt. Hon. William
Savery, S. S.
Ward, Lieut.-Col. Sir A. Lambert


Owen, Major G. (Carnarvon)
Scott, James
Warrender, Sir Victor


Penny, Sir George
Shakespeare, Geoffrey H.
Waterhouse, Captain Charles


Percy, Lord Eustace (Hastings)
Shepperson, Sir Ernest Whittome
Wayland, Sir William A.


Perkins, W. R. D.
Simms, Major-General J.
Wells, Sydney R.


Peters, Dr. Sidney John
Simon, Rt. Hon, Sir John
White, H. G.


Peto, Sir Basil E. (Devon, Barnstaple)
Skelton, A. N.
Williams, Charles (Devon, Torquay)


Power, Sir John Cecil
Smith, Louis W. (Sheffield, Hallam)
Wilson, G. H. A. (Cambridge U.)


Pownall, Sir Assheton
Smith, R. W. (Aberd'n & Kinc'dine, C.)
Windsor-Clive, Lieut.-Colonel George


Purbrick, R.
Smith-Carington, Neville W.
Winterton, Rt. Hon. Earl


Pybus, Percy John
Smithers, Waldron
Withers, Sir John James


Ramsay, T. B. Wilson
Snowden, Rt. Hon. Philip
Womersley, W. J.


Ramsbotham, H.
Somerset, Thomas
Wood, Rt. Hon. Sir Kingsley


Rathbone, Eleanor
Somerville, A. A. (Windsor)
Wright, Brig.-Gen. W. D. (Tavist'k)


Rawson, Sir Cooper
Southby, Commander A. R. J.
Young, Rt. Hon. Sir Hilton


Reid, David D. (County Down)
Spender-Clay, Colonel H.



Remer, John R.
Stanley, Lord (Fylde)
TELLERS FOR THE AYES.—


Rentoul, Sir Gervals S.
Stanley, Hon. O (Westmorland)
Captain Wallace and Major


Rhys, Hon. C. A. U.
Steel-Maitland, Rt. Hon. Sir Arthur
McKenzie Wood.


Richardson, Sir P. W. (Sur'y, Ch'te'y)
Stewart, W. J. (Belfast, South)



NOES.


Adamson, Rt. Hon. W. (Fife, West)
Edmunds, J. E.
Kennedy, Rt. Hon. Thomas


Adamson, W. M. (Staff., Cannock)
Edwards, E. (Morpeth)
Kenworthy, Lt.-Com. Hon. Joseph M.


Alexander, Rt. Hon. A. V. (Hillsbro')
Egan, W. H.
Kirkwood, D.


Alpass, J. H.
Forgan, Dr. Robert
Lang, Gordon


Ammon, Charles George
Freeman, Peter
Lansbury, Rt. Hon. George


Arnott, John
Gardner, B. W. (West Ham, Upton)
Lathan, G. (Sheffield, Park)


Attlee, Clement Richard
Gardner, J. P. (Hammersmith, N.)
Law, Albert (Bolton)


Ayles, Walter
Gibbins, Joseph
Law, A. (Rossendale)


Baker, John (Wolverhampton, Bilston)
Gibson, H. M. (Lancs, Mossley)
Lawrence, Susan


Baldwin, Oliver (Dudley)
Gill, T. H.
Lawrie, Hugh Hartley (Stalybridge)


Barnes, Alfred John
Gossling, A. G.
Lawson, John James


Barr, James
Gould, F.
Lawther, W. (Barnard Castle)


Batey, Joseph
Graham, D. M. (Lanark, Hamilton)
Leach, W.


Bennett, William (Battersea, South)
Graham, Rt. Hon. Wm. (Edin., Cent.)
Lee, Frank (Derby, N.E.)


Benson, G.
Greenwood, Rt. Hon. A. (Colne)
Leonard, W.


Bowen, J. W.
Grenfell, D, R. (Glamorgan)
Lewis, T. (Southampton)


Bowerman, Rt. Hon. Charles W.
Griffiths, T. (Monmouth, Pontypool)
Logan, David Gilbert


Broad, Francis Alfred
Groves, Thomas E.
Longbottom, A. W.


Brockway, A. Fenner
Grundy, Thomas W.
Longden, F.


Bromfield, William
Hall, F. (York, W. R., Normanton)
Lunn, William


Bromley, J.
Hall, G. H. (Merthyr Tydvil)
Macdonald, Gordon (Ince)


Brooke, W.
Hall, J. H. (Whitechapel)
McElwee, A.


Brothers, M.
Hall, Capt. W. G. (Portsmouth, C.)
McKinlay, A.


Brown, Rt. Hon. J. (South Ayrshire)
Hamilton, Mary Agnes (Blackburn)
MacLaren, Andrew


Brown, W. J. (Wolverhampton, West)
Hardie, David (Rutherglen)
Maclean, Neil (Glasgow, Govan)


Buchanan, G.
Hardie, G. O. (Springburn)
MacNeill-Weir, L.


Bargees, F. G.
Hastings, Dr. Somerville
Mansfield, W.


Buxton, C. R. (Yorks. W. R. Elland)
Hayes, John Henry
March, S.


Cameron, A. G.
Henderson, Right Hon, A. (Burnley)
Marcus, M.


Cape, Thomas
Henderson, Arthur, Junr. (Cardiff, S.)
Marley, J.


Carter, W. (St. Pancras, S.W.)
Henderson, Joseph (Ardwick)
Marshall, Fred


Clarke, J. S.
Henderson, Thomas (Glasgow)
Mathers, George


Cluse, W. S.
Henderson, W. W. (Middx., Enfield)
Maxton, James


Clynes, Rt. Hon. John R.
Herriotts, J.
Messer, Fred


Cocks, Frederick Seymour
Hicks, Ernest George
Middleton, G.


Compton, Joseph
Hirst, G. H. (York W. R. Wentworth)
Mills, J. E.


Cove, William G.
Hirst, W. (Bradford, South)
Milner, Major J.


Cripps, Sir Stafford
Hoffman, P. C.
Montague, Frederick


Daggar, George
Hollins, A.
Morgan, Dr. H. B.


Daltas, George
Hopkin, Daniel
Morley, Ralph


Dalton, Hugh
Horrabin, J. F.
Mort, D. L.


Davies, D. L, (Pontypridd)
Jenkins, Sir William
Muggeridge, H. T.


Davies, Rhys John (Westhoughton)
John, William (Rhondda, West)
Murnin, Hugh


Day, Harry
Jones, J. J. (West Ham, Silvertown)
Naylor, T. E.


Dukes, C.
Jones, Morgan (Caerphilly)
Noel Baker, P. J.


Duncan, Charles
Jowett, Rt. Hon. F. W.
Noel-Buxton, Baroness (Norfolk, N.)


Ede, James Chuter
Kelly, W. T.
Oldfield, J. R.




Oliver, George Harold (Ilkeston)
Shield, George William
Turner, Sir Ben


Owen, H. F. (Hereford)
Shiels, Dr. Drummond
Vaughan, David


Palin, John Henry
Shillaker, J. F.
Viant, S. P.


Paling, Wilfrid
Shinwell, E.
Walkden, A. G.


Palmer, E. T.
Short, Alfred (Wednesbury)
Walker, J.


Parkinson, John Allen (Wigan)
Simmons, C. J.
Wallace, H. W.


Perry, S. F.
Sinkinson, George
Watkins, F. C.


Pethick-Lawrence, F. W.
Sitch, Charles H.
Watson, W. M. (Dunfermline)


Phillips, Dr. Marlon
Smith, Ben (Bermondsey, Rotherhithe)
Watts-Morgan, Lt.-Col. D. (Rhondda)


Pole, Major D. G.
Smith, Frank (Nuneaton)
Wellock, Wilfred


Potts, John S.
Smith, Tom (Pontefract)
Welsh, James (Paisley)


Price, M. P.
Snowden, Thomas (Accrington)
Welsh, James C. (Coatbridge)


Quibell, D. J. K.
Sorensen, R.
Westwood, Joseph


Raynes, W. R.
Stamford, Thomas W.
Whiteley, Wilfrid (Birm., Ladywood)


Richards, R.
Stephen, Campbell
Whiteley, William (Blaydon)


Richardson, R. (Houghton-le-Spring)
Strachey, E. J. St. Loe
Williams, David (Swansea, East)


Riley, Ben (Dewsbury)
Strauss, G. R.
Williams, E. J. (Ogmore)


Riley, F. F. (Stockton-on-Tees)
Sullivan, J.
Williams, Dr. J. H. (Llanelly)


Ritson, J.
Sutton, J. E.
Wilson C. H. (Sheffield, Attercliffe)


Romeril, H. G.
Taylor, R. A. (Lincoln)
Wilson, J. (Oldham)


Rowson, Guy
Thorne, W. (West Ham, Plaistow)
Wilson, R. J. (Jarrow)


Salter, Dr. Alfred
Thurtle, Ernest
Wise, E. F


Samuel, H. Walter (Swansea, West)
Tillett, Ben
Young, R. S. (Islington, North)


Sawyer, G. [...].
Tinker, John Joseph
Young, Sir R. (Lancaster, Newton)


Scrymgeour, E.
Toole, Joseph



Sexton, Sir James
Tout, W. J.
TELLERS FOR THE NOES.—


Shepherd, Arthur Lewis
Townend, A. E.
Mr. Charles Edwards and Mr.




Charleton.


Question, "That the Clause stand part of the Bill," put, and agreed to.

CLAUSE 6.—(Increase in standard rate of income tax for 1931–32.)

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Earl WINTERTON: I think it is a good rule that when we are working under the Guillotine, those questions in which the Opposition take most interest, should be most discussed. That is a, view which I have always held when in Opposition, and which I do not propose to alter now when I am supporting the Government. I do not wish, therefore, to detain the Committee long with the observations which I wish to make on this Clause, nor do I ask my hon. and gallant Friend the Financial Secretary even to make a reply to those observations. At the same time, I think it is desirable that attention should be called to certain aspects of the subject matter of this Clause.
In the first place, I draw attention to what I believe to be the effect on foreign opinion of the very high direct taxation, the very high Income Tax, which we have in this country and which is being increased by the present Budget. I do not suppose it will be disputed that it is important in the case of a great manufacturing, trading, and exporting country like ours, that what might be termed our economic prestige abroad should stand at a high level. I am convinced that foreign observers who are well disposed towards this country regard our high Income Tax as having two very evil effects on our trade
and industry—first in affecting our competitive power, and second in reducing our chances of recuperation. Nor is that view confined to foreign observers or to those who sit on this side of the Committee. The Chancellor of the Exchequer, when he was a member of the party opposite, made a statement which attracted a great deal of attention at the time when speaking at Liverpool during January, 1928. The right hon. Gentleman then said that a high Income Tax affected savings and reduced them, especially when placed on company reserves.
There is another point in connection with the effect of our high direct taxation on foreign opinion. My experience of travelling in foreign countries and of talking with well-informed observers of events in this country and other countries, has gone to show that they think that we tend to be rather proud of our self-imposed burden and that we are inclined to say that we are crippled and proud of it. I think it very necessary that we ought not to give the impression that we regard our high Income Tax or its increase in this Clause as anything but a serious bar to trade revival. We must be careful as a country, and we must be careful in this Committee and in the House of Commons not to suggest that what is really an evil is a merit. I agree with what the Financial Secretary to the Treasury said in his speech on the Second Reading of this Bill when he pointed our how enormously the burdens on the direct tax-
payer and on the Income Tax payer in particular had increased during recent years, but even he may have given the impression to foreign observers—though I am sure such was not his intention—that we regarded this accretion of direct taxation in this country as a benefit. Common sense and common experience in every country, including our own, shows that it is not a benefit but an evil and it would be a great mistake if, in order to please the populace, we tried to make a merit of what is obviously a great bar to prosperity.
I will not detain the Committee by going into all the arguments which are usually put forward in support of Income Tax. The most common of those arguments, the one which has almost become a cliche in our Debates, is the argument that the heaviest weight of taxation should be placed on the broadest back. From an ethical and theoretical point of view that is, no doubt, what is desirable, but it is unfortunate that, sometimes, the effect of placing taxation on the broadest back is that the shoulders of the broad-backed taxpayer become so crippled that he is compelled to divest himself of other burdens, in respect of the labour which he employs and the wages which he is able to pay. That is a fact to which too much attention cannot be paid. My right hon. Friend the Member for Epping (Mr. Churchill) in a speech in this House some three years ago pointed out the significant fact that taking together all the years since the boom year of 1920, the highest proportion of unemployment was in this country, which is also the most highly directly taxed country in the world. The significance of this circumstance is remarkable and there is more than a mere coincidence in this relation of unemployment to direct taxation.
There is another argument used by hon. Gentlemen opposite when there is any proposal to increase direct taxation. It is not an argument which they use quite so frequently to-day, since the incidence of the Income Tax has been extended, but I have heard it used in the course of these Debates. It is that an increase of Income Tax seldom or never means that any Income Tax payer has to go without a meal by reason of it, or is affected, to any large degree, by it in his personal comfort and safety. That may be true, but the fact remains that in con-
stituencies like mine, where a very large amount of the available employment is given by direct taxpayers, every rise in the tax means that other people may have to go without a meal because it is no longer possible to afford the same amount of employment. It would be out of order to discuss it on this Clause, but it seems to me that if you are going to use what I may call the meal argument, then logically you ought to provide those people who are displaced from work as a result of increased taxation with some alternative means of employment. At the present time, in connection with this Budget, on neither side of the House are any proposals being put forward for finding employment for those displaced from work by reason of the increased taxation.
Lastly I would say that no arguments have ever been brought forward at any time in our Debates on the subject of Income Tax to meet this point, which was put by the Chancellor of the Exchequer in so many words when he was a Member of the late Government—that the Income Tax is a tax on the material which is required for refuelling industry. If the Government take the fuel and burn it, often for no economic end, there is so much less fuel for industry. [Interruption.] I gather that the hon. and gallant Member for East Rhondda (Lieut.-Colonel Watts-Morgan) who, I understand, is regarded in his own part of the world as a great financier does not agree with my views. But he will find that they are true. He will find that one of the reasons why there is so much unemployment in the neighbourhood from which he comes is the heavy incidence of direct taxation on industry.

Lieut. - Colonel WATTS - MORGAN: When the Income Tax was 6s. in the pound employment was greater, and wages were higher. Will the Noble Lord deal with that point?

Earl WINTERTON: Certainly, because that particular year was a year in which there were boom conditions throughout the world. In 1920, both highly taxed and low-taxed countries were in the same position. But leaving aside the world boom from 1920 onwards, it will be found that in this country, with the highest direct taxation of any country, the proportion of unemployment per head of the population has been higher than in, any other
country, and I say that nobody has ever met that argument, that by your taxation of the direct taxpayer you are diminishing the fuel of industry. While everyone on this side will support this proposal in. the Budget as a necessity, which can only be described as a very painful operation to save the patient's life, after the operation he will not be stronger but weaker, though he would be worse off if he had not had the operation. I am sure that all of us, not only on this side, are looking forward to the other medical remedy which we are told is to be applied by the Prime Minister shortly, but the remedy for industry contained in this Clause is not a remedy at all, but very much the reverse, or only a remedy in the sense that without it the patient would be worse off than he is to-day, but with it alone he will not be enabled to recover.

Mr. MILLS: The speech of the Noble Lord more than ever makes exact the old and classic phrase that a Bourbon learns nothing and forgets nothing, but in this instance the right hon. Gentleman has forgotten something. There is in Westminster Hall a tablet which marks the spot where Warren Hastings stood his trial. Some day the memory of the right hon. Gentleman opposite will stand its trial in public opinion with regard to the destruction of Indian commerce, because he was Under-Secretary of State for India—

The DEPUTY-CHAIRMAN (Captain Bourne): The hon. Member is wandering rather far from the Clause.

Mr. MILLS: The Noble Lord took advantage of this Clause to indict the party on these benches for their policy with regard to the raising of money for the Government, and its effect on world employment. When he was Under-Secretary of State for India, in opposition to the opinion of every recognised authority on Indian finance, when they dragged India off the Silver Standard—

The DEPUTY-CHAIRMAN: No doubt Indian finance is a very fascinating subject, but I do not see how it can be related to the standard rate of Income Tax in this country.

Mr. MILLS: I will not pursue the subject further except to say—and I think I
may be allowed to finish that point—that the Under-Secretary of State and his colleagues at that time, when the whole of Indian opinion was asking for it to be stabilised at 1s. 4d.—

The DEPUTY-CHAIRMAN: This has nothing to do with the standard rate of Income Tax.

Mr. MILLS: I will submit to your Ruling, and before we get away from this I will get the right hon. Gentleman where I want him. With regard to his general contention, when the Noble Lord used to sit in the seat that has been made famous by the hon. Member for Bridgeton (Mr. Maxton), in the days of 1920 and 1921, when the Income Tax stood at 1s. in the pound higher than is proposed to-day, as my hon. and gallant Friend has stated, and when, on top of that, there was Excess Profits Duty, at that period we had the lowest unemployment in British history since the War, but nobody knows better than does the Noble Lord that if there was one contributory factor to world-wide unemployment, it was the policy to which he was a ready subscriber in attempting to secure from defeated countries the policy by which they won the Election of 1918, and my colleague and every miner in the country knows—

The DEPUTY-CHAIRMAN: The hon. Member is again getting very far from the standard rate of Income Tax, and I must ask him to apply himself to that.

Mr. MILLS: Very well, Captain Bourne. On every Finance Bill since 1921, at every period that has followed there has been this pegging back of British industry to a theoretical exactitude called the Gold Standard, and ever since the Reparations Commission decided that Germany should pay in coal instead of paper, the mining industry has been destroyed, and taxation such as has had to be levied to meet unemployment has been a direct result of the gross mismanagement of the policy of this country towards the world. If there was any imagination, any constructive idea, for restarting the wheels of industry in any given corner of the world, nobody could do it better than the right hon. Member sitting by the Noble Lord, the right hon. Member for Tamworth (Sir A. Steel-Maitland). He could speak with immediate and certain knowledge as to
what extent the unemployment problem has been made bigger. I know he would not get up and say I am wrong. Anyone who speaks with any idea of the trade and commerce of this country, which has a direct bearing on taxation, knows that it has been almost irrevocably destroyed by the lopsided, shortsighted and vicious policy of the finances of this country in relation to the Silver Standard and the purchasing power—

The DEPUTY-CHAIRMAN: The hon. Member must keep to the standard rate of Income Tax.

Mr. MILLS: I will only say, in conclusion, that the next time the Noble Lord opposite gets up to take advantage of the Committee to deliver a general attack on the theories of taxation, I shall be able to meet him on ground on which I shall be able to deal with him as I would like.

Sir ASSHETON POWNALL: The hon. Member for Dartford (Mr. Mills) has found it as difficult to keep off the Silver Standard as this country has found it difficult to keep on the Gold Standard. In a good many years in this House I have never heard a more unsound analogy given than to compare the state of unemployment in 1919–1920, when, it is true, we had a 6s. Income Tax, with that of to-day, when we have a 5s. Income Tax. We have to remember that in 1919 there were hundreds of thousands of men who were not demobilised. We have also to remember that there was a world-wide shortage of necessaries and commodities, that the whole world had been in uniform, and that in 1921, when we were still with a 6s. Income Tax—which continued, I may remind hon. Members, till the Spring of 1922—we then had, in 1921 and 1922, an immense amount of unemployment; and one reason why the Income Tax was reduced in the Spring of 1922 was that trade was so thoroughly bad that industry could no longer bear so high a tax.
I may, perhaps, pay some tribute to the sufferings of the Income Tax payers up and down the country, which have been so patiently borne ever since the War. We are all liable to forget that before the War Income Tax was 1s. or 1s. 2d. in the pound and that Super-tax went up to about 1s. in the pound. Surtax is now about 8s. 3d. in the pound, on
top of a 5s. Income Tax, and there is no country in the world in which the burden of taxation has been borne so patiently as it has by the Income Tax payers of this country. I might perhaps couple that with the fact that there is no country in the world which has stood up to the problem of unemployment as manfully as we have and which has done so much for the unemployed, and it is not unfair to couple the two things together.

Mr. MILLS: In 1920 and 1921 were we not the only source of supply of coal to France, Belgium, and Italy?

Sir A. POWNALL: I should think that is very likely the case, but that is only one of many industries which were thriving, but which slumped in the summer of 1920. My point in regard to Income Tax is that I think that while we have strong grievances, reflected in the Lobbies, from those who have suffered cuts, we should bear in mind the fact that the Income Tax payers have no way of putting their grievances before us.

Mr. CARTER: Where is the Tory party?

Sir A. POWNALL: I am pointing out that Income Tax is now five times what it was before the War, and I shall vote for the increase in the tax to-day, as I imagine my hon. Friends will do, but I do say that the Income Tax payer deserves a certain measure of sympathy, which I do not think he gets from hon. Members opposite, many of whom are themselves Income Tax payers to a considerable extent. Let us give the Income Tax payer his weed of justice, and let us remember that we are putting a burden on the Income Tax payer that no other country in the world is doing, and that it is thanks very largely to him that we have been able to carry on without reducing our currency hitherto by four-fifths, as France, for instance, has done.

CLAUSE 7.—(Higher rates of Income Tax for 1930–31.)

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Mr. ARNOTT: I want to call attention to the incidence of taxation as altered by the proceedings of this Government.
At Question Time to-day I called attention to the very misleading White Paper which has been issued by the Government. It was intended, I suppose, as an answer to certain criticisms upon the taxation of higher incomes imposed in this Budget that were made by the hon. Member for West Leicester (Mr. Pethick-Lawrence) and by the hon. Member for Chesterfield (Mr. Benson) on the Second Reading. It is intended to convey the impression that the taxation on the higher incomes is quite as big proportionately as on the lower incomes, and in order to prove that, there are set out in the White Paper, in the final column, the increases of taxation imposed at the present time, but I would point out that they are not the increases in taxation imposed by the present Government, but combine the increases imposed by this Government and by all the Governments since the right hon. Member for Epping (Mr. Churchill) was Chancellor of the Exchequer.
In order to show the difference, I will take the extreme case given at the end of the White Paper. On an income of £100,000 the Income Tax and the Super-tax combined is now £61,490, which seems, of course, a very large sum, and at the end the increase is given as £14,333 5s., which is rather more than 10 per cent., but when we examine the figures closely, we find that the bulk of that increase was imposed 18 months ago, and that the real increase imposed by the present Government is £6,852, or 6.8 per cent. Therefore, the taxation imposed on the wealthy people is very much lower than the taxation imposed on those who are not quite so well off. The same is true of the £50,000 income. The White Paper is deliberately intended to make the casual reader believe that there is an increase of £6,000 on an income of £50,000. I am taking the income of a married couple with three children. As a matter of fact, the net increase is only £2,726 12s. 6d.—an increase of about 4 per cent. We might go through the whole of the figures in this Paper and find the same results.
The present Government have shown a remarkable aptitude for sheltering themselves behind the responsibilities of their predecessors, and of claiming all the credit of their predecessors. If we look
upon the Chancellor of the Exchequer as a sort of Jekyll and Hyde, you can choose whether the Socialist or the Tory in him is the Jekyll. The policy which he pursued when he was the Socialist Chancellor of the Exchequer was to increase the taxation of the well-to-do, and particularly that of the Super-tax payer, and to decrease the taxation of the poorer sections of the community. Bit by bit he removed indirect taxes and gave increased allowances to the Income Tax payer of the lower grades. At the same time, he increased the ordinary Income Tax and to a greater degree the Super-tax. That may be a good or bad policy. We think it is a good policy, and hon. Members opposite say it is bad. We have an echo of their feelings in the speech of the Noble Lord on the preceding Clause. He warned us that the Income Tax payer did not really pay the Income Tax at all—

Earl WINTERTON: I did not say that. I said that one result of an increase in Income Tax is that many employers are no longer able to employ the number of people that they did before.

Mr. ARNOTT: The point the Noble Lord made is that Income Tax is imposed on industry and not on the person who is nominally alleged to pay it. That is to say, Income Tax, instead of being taken out of his private income which he spends on his private enjoyment, is taken out of the industry out of which he usually draws his income. It must be taken out of that industry in one of three ways. He either fails to invest money in that industry which he otherwise would do, and in that case checks development; or he adds the Income Tax to the price of the commodities which he sells, in which case it lessens his sales; or he takes his Income Tax out of other expenses, chiefly out of wages, and in that ease it comes out of the working people. Unless he does one of these things, Income Tax cannot possibly hurt industry. It cannot hurt industry as industry. Suppose a wealthy coalowner is compelled to give up a holiday on the Continent, that does not bit industry in this country. It can only hit industry if he expects to get his Income Tax out of the coal before he uses his income for his private use.
If that can be argued in regard to Income Tax, it cannot be argued in regard to Super-tax. The Super-taxpayer does not have Super-tax stopped at the source. He has to be assessed for it certainly. In the ordinary course of events, it would come out of income, and it can only- affect industry if industry is paralysed because it is starved of a sufficient supply of fluid capital. Will anyone say that industry is paralysed because the tax has been so heavy that nobody has any money to invest, although profitable avenues for investment are available? If that argument is sound, nearly everything in which we have been engaged in the past two years has no value whatever, because if there is insufficient capital available for carrying on industry, the obvious thing is to carry on with much more drastic economies than are suggested in the Government's proposals. But no one seriously believes that.
The increase of taxation is opposed by the party opposite, or it is lower than it otherwise would be, because they realise that heavy Income Tax and Super-tax does reduce the portion of the national dividend that goes to wealthy people and makes available money for social services. They know that perfectly well. When you compare the proposals in the Finance Bill, and particularly the increases in the Super-tax and the higher rates of Income Tax with the increases that are imposed on other sections of the community through taxation and by means of the Economy Bill, it is perfectly clear that the claim for equality of sacrifice is a farce. The policy advocated by the Chancellor of the Exchequer since he first entered this House, and for years before he ever entered the House, to carry out which many of us worked hopefully to get him into the House, is that a great deal of improvement could be won for the people merely by taxation and the transference of the surplus incomes of the few to meet the needs of the many. That may not commend itself to the right hon. Gentleman's present supporters, but that was his special contribution to the Socialist movement. That was a policy he pursued as Chancellor of the Exchequer in the 1923–24 Government and which he pursued as Socialist Chancellor in the late Labour Government.
That policy is now entirely reversed, and I am surprised that his new colleagues have not the courage of their con-
victions. If it prejudices the industry of the country so much to put heavier burdens upon the Super-tax payer, why do they not show in black and white how the extra taxation is crippling industry. Why do they hide it in this White Paper and not show it plainly without giving Members the trouble to make sums in subtraction. Why not show the taxes that exist now and the taxes that will exist under this Finance Bill? They ought to be proud of what they are doing, but they are ashamed of it, and that is why they take this method of hiding it.

Sir JOHN POWER: It is universally recognised that Income Tax and Super-tax are a grave burden, and there is hardly any need to go into that question. The amount collected is to -be enormous, and it is useless to insist that that is not a grave burden on industry. Do hon. Gentlemen opposite think that all this money comes out of the air? We are raising in taxation an amount equal to one-third of the national income; the whole of the national income has to be worked for, and the amount required for State purposes has to be produced annually by the efforts of the population. I find it difficult to understand why hon. Members opposite cannot realize that all taxation of this kind is a detriment to industry. It causes unemployment, and the higher your taxation the higher your ratio of unemployment becomes. You cannot take money from a man who pays wages without affecting the fortunes of the men who receive wages. That is the simple proposition.
The second proposition is that the giving of careers in this country to the younger people is becoming rather a serious problem, because it is now evident to most young people that their future in the country is becoming heavily circumscribed. We are suffering from an export of brains, and that is a serious thing for the future. A great many young people come to me for advice, and they all have the same tale to tell—that they see no future for themselves because, if they attain a position of responsibility with a reasonable salary, the 'best part of that salary will go in taxation for purposes for which they do not approve. Whether they are right or wrong, that is the condition of things to-day, and to maintain that this
heavy taxation to which we are submitting now, with as much cheerfulness as we can, is a good thing for the country and industry, is absurd. Do hon. Gentlemen opposite say that the taxes that are imposed on company reserves, which would otherwise go to provide fresh and new machinery for greater employment and efficiency, is an advantage? We on this side do not. We think that this is a burden which we shall be forced to bear by the emergency of the country, but we hope that some day industry will be released to a certain extent from these heavy burdens. Until some relief is given to industry, I cannot see how we are going to compete with our foreign rivals.

7.0 p.m.

Mr. PETHICK-LAWRENCE: The hon. Member for Wimbledon (Sir J. Power) has forgotten that we are not discussing Income Tax, but Super-tax, and when he talks of the burden that falls upon company reserves, he is really discussing something which is not strictly germane to the Clause which is under discussion. I do not rise to argue that the burden imposed under Clauses 6 and 7 involves no sacrifices. Everyone recognises that any additional taxation must of necessity imply a sacrifice, but what we on these benches say, and what we have said throughout, is that the slogan on which the Government appeal to the country of "Equality of sacrifice for all" is not carried out in the taxation here being imposed. In the earlier stages of these proposals, on the Ways and Means Resolutions and on the Second Reading of the Finance Bill, I made certain comparisons, and my figures were challenged by hon. Members opposite who said that they were inaccurate. I very much dislike having my figures challenged, and I have taken the trouble of carefully going into them again. What I said at the time was that, so far as the man with £5,000 a year was concerned, the additional burden imposed on him by this Finance Bill was a smaller percentage of his income than in the case of a man with £500, and that the burden imposed on the man with £500 was a smaller percentage of his income than the burden which fell upon the civil servant with £150, owing to the various proposals of
the Government, or upon the unemployed.
I have worked out the figures, and let us see what the facts are. Take, first of all, the case of a single man with an income of £5,000. He is called upon to face an additional burden under this Bill of £150, or 3 per cent. of his income. The single man with £500 a year is called upon to face an additional burden of £21, or 4 per cent. of his income. So that it is undoubtedly true that the effect of the Super-tax and Income Tax on a man with £5,000 a year is a smaller proportion of his income than that imposed on the man with £500 a year. When you come down to the burden imposed on the civil servant, it works out at 5 per cent. and on the unemployed at 10 per cent. of their income. So far as the single man is concerned, I was then fully justified in the statement I made that it was not a question of equal sacrifice. If you consider the married man without children, you get slightly varying figures, but the contention I made is much the same. When you come to the case of the married man with three children, it is quite true that on a £500 a year income the married man is not paying a large increase, but, if you go a little higher, to £600 or £700, and compare it with £6,000 or £7,000, you will find that with the much larger income the sacrifice is very much less.
The ground on which hon. Members opposite question my figures is that they propose an arbitrary method of reckoning the sacrifices involved. Instead of taking the proportion of the whole income, they propose to take the proportion of the income that is left. I believe that is the reason why they dispute my figures. Of course, that is an entirely new method of reckoning a sacrifice of this kind. If you are going to take the sacrifice on that part of his income which is left after taxation, if you are going to do that with the direct taxpayer, you have got to do that throughout the scale and to do it, too, when you are dealing with the workmen and the unemployed. In their cases you must take into account the indirect taxation that falls upon them. As we all know, the greater part of the burden on the wealthy people is the direct taxation, and the greater part of the burden on the poorer class is the indirect taxation. We must take that
into account but that is not all. This House has imposed on the people of this country a number of other burdens. We have imposed upon them the premiums for unemployment insurance and for other things, and all those have got to be taken into account. You will get a different result if you include those. I would go further than that and say that, so far as the unemployed man is concerned, you must bear in mind the rent he has to pay and the necessities of life that he must face. If you add all that, you will discover that a 10 per cent, cut in unemployment benefit is not 10 per cent, of his margin, hut 50 per cent. or 100 per cent., or even more than that. If you include all that, my argument still stands.
But even if you take the whole income of the working man and pay no attention to indirect taxation, to his rent, or to other burdens he has to pay, what have you then? If you take the position simply by subtracting taxation from the income, you find this result. Take a single man with £5,000 a year. You are asking him in this Bill to make a sacrifice which only just exceeds 4 per cent. of the income which was left, whereas the additional burden that you are imposing on the single man with £500 is 4½ per cent. Compare that with the burden imposed on the civil servant with £150 a year of over 5 per cent, or on the unemployed of over 10 per cent. It is, therefore, clear that, even on that artificial reckoning which hon. Members opposite have sought to apply to these provisions, the principle of equality of sacrifice, which the Government profess to have carried out, is not carried out in this Bill.

Major ELLIOT: It is worth while to say immediately that we continue to challenge the figures of the hon. Member for West Leicester (Mr. Pethick-Lawrence). We continue to challenge his percentages, the basis of his conclusions, and the conclusions he draws. Our argument against them is absolutely borne out by the figures which he has brought forward. It appears that his calculations are wrong, because he says that the percentage on a figure of £5,000 is just over 4 per cent.

Mr. PETHICK-LAWRENCE: Three per cent.

Major ELLIOT: I was being more generous to him than he was. I thought he had at least abandoned his ridiculous fallacy that in counting a man's income you must count the bit the tax gatherer had already taken as well as the bit he himself enjoys.

Mr. PETHICK-LAWRENCE: I said the other was ridiculous reckoning, but even on that it is 4 per cent. If you do not abandon that method, you should take off the indirect taxation from the poorer people.

Major ELLIOT: I shall deal with both these points, and I shall disprove them, and I shall go on to the indirect taxation and disprove that. This figure of 3 per cent., he says, is an arbitrary basis. It may be an arbitrary basis to say that a man cannot spend the money which the tax gatherer has got, but it is a very true basis. He says then that on that arbitrary basis the calculation is not 3 per cent. but 4 per cent. The calculation is inaccurate, because it is not 4 per cent, but 4.9 per cent. or nearly 5 per cent. The £500 a year man, he says, is 4.6 per cent. He says that the £5,000 a year man pays less. It is not less, but it is greater.

Mr. PETHICK-LAWRENCE: I think the hon. and gallant Member is taking the last column, which is the increase not imposed under this Bill but since 1929. There can be no doubt about the figure, because the increase of a single man with £5,000 a year is set out perfectly clearly here as the difference between 21,313 and £1,465, which is £152. Even if you start with the net income that the taxpayer has, he is left £3,700. I challenge the hon. Gentleman arithmetically when he says that is practically 5 per cent.

Major ELLIOT: I take up that challenge that the hon. Gentleman makes. A man last year with £5,000 paid Income Tax and Super-tax of £1,350. The net income available was £3,650. He is now called upon to pay a further sum—

Mr. PETHICK-LAWRENCE: I am talking about the earned income. The figures are given in the White Paper, and show that the total for Income Tax and Super-tax is £1,313. The hon. Gentleman is not reading the White Paper.

Major ELLIOT: The figures I am taking are the figures with regard to investment income.

Mr. PETHICK-LAWRENCE: I said earned income.

Major ELLIOT: I was giving the hon. Member the figures most favourable to his own case—the figures of the rentier, about whom we hear so much. The figures show that the man is called upon to pay a further sum of £178 not out of £5,000, which he does not get, but out of £3,630, which is what he gets. On that basis the percentage of additional sacrifice is 4.9 per cent.

Mr. PETHICK-LAWRENCE: The hon. Gentleman has changed over from the basis I was taking to the invested income. I am perfectly willing to do that if he will do that with the man with £500 a year, for in that case he will find—

Major ELLIOT: Obviously, when we are dealing with these complicated tables, unless by a lecture with a blackboard, we shall never come to a complete agreement.

Mr. ARNOTT: Will the hon. and gallant Member apply the same principle to deal with Estate Duties?

Major ELLIOT: I am going to deal with the hon. Member also. What I am saying quite definitely and without any qualification or hesitation is that the hon. Member stated that the extra tax on an income of £5,000 is a 3 per cent. tax on the income left after the tax gatherer. I said that it was not 4 per cent., but 4.9 per cent.

Mr. MUGGERIDGE: Different factors.

Major ELLIOT: It is possible that he was using one income and I was using the other.

Mr. MUGGERIDGE: A different basis.

Major ELLIOT: It shows the great difficulty of dealing with those questions at all. I say, first of all, that you have got to take the income that was left, and calculate on that. Secondly, if you take that basis, the argument which the hon. Member for West Leicester put forward does not hold water on the basis even of arithmetic.

Mr. PETHICK-LAWRENCE: Let me take his own figures. I will take invested income instead of earned income if he likes. I thought that earned income was fair, but, taking invested income on his own basis of a single man who has got £5,000 and of the single man who has got £500, he will find—if I am correct as I think I am—that the man with £500 was called upon to make a greater sacrifice than the man with £5,000.

Major ELLIOT: We will leave it at that. I have given the sum three times. I have no desire to delay the Committee by giving it again.

Mr. MUGGERIDGE: Disprove it.

Major ELLIOT: I have disproved it completely. I have disproved the figures put forward by the hon. Member that the extra sacrifice on a man with £5,000 a year is 3 per cent. I have disproved that completely.

Mr. PETHICK-LAWRENCE: I cannot allow that statement to pass. The hon. and gallant Member has not disproved it at all. The figures I gave were for earned income. He has taken unearned income and not earned income; but he has not disproved the essential point that, whether it is earned income or investment income, the fact remains that the sacrifice you are asking of the taxpayer is greater in the case of the £500 a year man than of the £5,000 a year man—in percentages.

Major ELLIOT: I thought we had at last come to an agreement, but now it appears that we have not completely done so. Whether you take an earned income of £5,000 or an unearned income of £5,000, to make a basis of calculation of the size of the levy by leaving out altogether the fraction of the income—the very large fraction—which has been removed by the tax gatherer vitiates the argument.

Mr. PETHICK - LAWRENCE: Leave that out, and still I am proved right.

Major ELLIOT: That is the first point I wish to make. The hon. Member said we have got to take into account indirect taxation as well. I can only say that the figures which we have taken out for the taxation upon the man with a small income show that for the
lower ranges of earned income the total tax is actually less upon him now than it was in 1925–26. In the year 1931–32 the total tax upon a household is £2 1s. 6d., whereas in 1925–26 it was £3 2s. 3d. That was on an income of £150. For an income of £200 it is still less—£2 3s. in 1931–32 and £3 4s. 9d. in 1925–26. In the case of a £500 a year income, although the total tax is higher to-day, it is not vitally higher than it was in 1925–26. In that year the figure was £13 10s. 4d., for the household, and it is £17 4s. 9d. for 1931–32. Surely these figures disprove the contention of the hon. Member for West Leicester that the burden laid upon the higher ranges of income is not adequate to the situation in which the country finds itself—that is, on his narrow analysis dealing only with last year. Now I come to the extraordinary contention of the hon. Member for South-West Hull (Mr. Arnott), who had the audacity to put forward the suggestion that no account of the previous enormous increases in Income Tax, Super-tax and Death Duties should be taken into consideration. Why not?

Mr. ARNOTT: For the simple reason that we are dealing now with an emergency—so we are told—and in considering the extra taxation imposed as a result of that emergency we are not warranted in taking into account the previous taxation.

Major ELLIOT: That shows that I was well justified in using the word "audacity" in speaking of his argument. Does he think that the emergency suddenly burst up under the floor of the House of Commons when the National Government was formed, or even when his own Government were running away?

Mr. ARNOTT: Yes, certainly.

Major ELLIOT: Then if we took the brains of the hon. Member and pounded them with a pestle, it would be in vain to try to make him change his mind.

Mr. ARNOTT: Let the hon. and gallant Member ask his own Chancellor of the Exchequer, and he will say the same thing.

Major ELLIOT: I could quote chapter and verse from speech after speech of the Chancellor of the Exchequer for the on-
rush of the emergency in which we find ourselves. The Chancellor of the Exchequer, in speech after speech, on the Floor of the House of Commons, in the country, in the City, everywhere, called attention to it, and at the Labour meeting—

Mr. ARNOTT: He did not call attention to it in 1930.

Major ELLIOT: The Chancellor of the Exchequer not only called attention to it, but actually said that he did not think industry could stand more taxation, and he was rebuked by hon. Members on the mountain up there. They are all compatriots of mine, and I know where they are looking. In the first Budget he introduced he said that industry ought to know what the size of the burdens to be laid upon it in the near future would be in the way of direct taxation, and that he hoped these were the furthest increases he would have to lay upon industry, and thereafter he called attention not merely to the general position, but to the specific difficulty with which we were faced through these vast increases in the unemployment figures. He said time and again that no Budget could stand an increase such as was being laid upon it by the enormous increases of the Treasury liability owing to the cost of transitional benefit and the burden coming upon the direct taxes of the country from that source. Does the hon. Member deny that? Does he question that?

Mr. ARNOTT: I certainly question the implication that the emergency now is precisely the same as it was then. Otherwise, why have we got the National Government?

Major ELLIOT: The hon. Member for South West Hull questions the fact that the emergency now is precisely the same as it was then, just as a man who had gone over Niagara might say, "This is not the same waterfall that I started to go over. It is not the same; it is a great deal worse." The situation is graver, but the efforts put forth on the brink of the precipice to prevent himself going over were a drain on his energy which leaves him with less energy to get out of the rapids. The huge drafts we made on the resources of the country in direct taxation in the years immediately before have to be taken into account, and are taken
into account by every serious student of economics when considering how much we can call upon the country to pay in direct taxes in the near future.

Mr. ARNOTT: Then why does not the hon. and gallant Member take 1913 instead of 1925?

Major ELLIOT: Does the hon. Member for South-West Hull really intend to delude us with the suggestion that this particular crisis began in 1913?

Mr. ARNOTT: No.

Major ELLIOT: No; and I really think we are indebted to the hon. Member for South-West Hull for bringing out an aspect of the situation which otherwise might not have been presented to us, and that is that the demands which have to be made upon the resources of this country to meet this situation began in the first Budget which the Chancellor of the Exchequer introduced. As everybody knows, it was one of the accusations against the right hon. Member for Epping (Mr. Churchill). [An HON. MEMBER: "De-rating!"] The right hon. Member for Epping had done his utmost by expedients, which were condemned in many parts of the House, to avoid a great new increase of direct taxation. When the present Chancellor of the Exchequer came in, he said we must deal with the present situation and he put on heavy increases of direct taxation to meet the coming emergency, and later he said, "When the emergency is on us, it will be almost impossible to increase direct taxation." The hon. Member for West Leicester laughs. I remember that statement distinctly.

Mr. ARNOTT rose—

The DEPUTY-CHAIRMAN: We cannot carry on the Debate in this way.

Major ELLIOT: The hon. Member for South-West Hull has done a service in calling attention by his fallacies to an aspect of the situation which otherwise might have been omitted in this House, although that fallacy is continually repeated in the country. The fallacy is that you can make unlimited drafts upon the direct taxpayer and then, when the crisis comes, find as much in the money box as there was before you made those par-
ticular drafts. That is recognised in every part of the House to be a, fallacy. The White Paper brings out, as the White Paper must bring it out, that increases of direct taxation cannot be related only to the taxation of this year but to the increases of previous years. The White Paper is absolutely justified—every figure of it, and is necessary to a correct analysis of the situation in which we find ourselves. What that shows is that the huge drafts which have been made by the direct taxation, and particularly the higher ranges of direct taxation, are drafts which were only justified by reason of the critical emergency in which the country finds itself, and are drafts of an order to which the taxpayers and those who are calling upon them to make this sacrifice will look back in future years as some of the heaviest calls which have ever been made upon the taxpayers of this or any other country.

Mr. BEAUMONT: I intervene only to try to get the Committee away from the fallacies of the hon. Member for South-West Hull (Mr. Arnott) and the financial juggling of the hon. Member for West Leicester (Mr. Pethick-Lawrence), because, frankly, I do not think it matters very much whether a man with £5,000 is paying 1 per cent. more or less than the man with £500. I have always disliked all this talk about equality of sacrifice, because I do not believe there can be equality of sacrifice or of anything else in this world. The hard workers, the good citizens, the patriotic, the beneficent of all classes will pay the hard burdens, and the skrimshankers and the spongers of all classes will get away. Nothing will ever alter that. I do not think this Clause depends on the question of percentages or juggling with figures, or whether somebody is to pay a little more than somebody else. The question is whether this money is being raised from the best source from which it can be raised. Hon. Members opposite have got some glorious theory that more money could be raised by higher Super-tax, and Income Tax. I except, of course, the hon. Member for Burslem (Mr. MacLaren), who has got some glorious theory that it could all come out of the land. People who say that we can get more money out of the taxpayer simply do not know what they are talking about. I doubt whether the increased
taxation on the large taxpayers which we have felt ourselves able to impose will produce the yield which the Chancellor of the Exchequer desires. The large taxpayers of this country have a large number of people dependent upon them—their employés of all sorts and descriptions. An hon. Member opposite shakes his head, but they have, and believe me I speak as one of them. I know perfectly well how this increased direct taxation is going to be met. It is going to be met by discharging employés.

Mr. W. J. BROWN: Shame!

Mr. BEAUMONT: The hon. Member for West Wolverhampton (Mr. W. J. Brown) cries "Shame," but that is the only way in which they can raise the money to pay the taxation. I am perfectly prepared to accept—though I do not agree with it—the view of hon. Members opposite that it is wrong that employés should be dependent upon rich people. At any rate, that state of things exists. Of course, employés have to live, and they have to eat and drink just the same as the people about whom hon. Members opposite made such piteous pleas last, week. If by high taxation we throw out of work the people who are engaged in our manufactures, those people will have to be kept by the national Exchequer. It is no use collecting more money from one class if by so doing you throw more people out of work, and place additional burdens on the Exchequer. I have frequently disagreed with the proposals of the Chancellor of the Exchequer, and no doubt I shall disagree with him again in the future. I do not pretend that this Budget contains all the proposals which I would like to have seen in it, but, taking the Budget all round, the Chancellor of the Exchequer has gone to the sources where he is most likely to get the money with the least amount of trouble. I submit that the Clause which we are now discussing is not the unfair thing which hon. Members opposite make it out to be, and I think it holds out a reasonable hope of getting in the money with as little unnecessary hardship to everyone concerned as possible.

Mr. TINKER: In a previous Debate I heard the Chancellor of the Exchequer state that the direct taxpayers could not stand any increased taxation, but that
view was never accepted by the right hon. Gentleman's followers in the Labour party, and we have always claimed that a larger sum of money ought to be raised by direct taxation. It has been argued in this Debate that taxation put upon the Super-tax payers and other rich people will have the effect of forcing people out of work, but that has always been the cry every time the Super-tax, the Income Tax and the Death Duties have been increased. I think that the balancing of the Budget could be achieved much better by a larger amount of direct taxation, and that is why we are opposing this particular Clause. We think this Budget ought to be balanced by taxing those who possess wealth. Money is not exhausted in this country, and figures have been produced showing that there are vast sums of accumulated wealth in the hands of the rich people. In times of stress, while the poor are suffering an unfair burden, the Chancellor of the Exchequer ought to have taxed more the people who are wealthy. I do not suppose that we shall make much difference in regard to the result of this Debate by our voices, and we recognise that the voting will be against us, but we cannot miss this opportunity of letting the Chancellor of the Exchequer and the people behind him know that we have, on every occasion, fought for the principle of more direct taxation and less indirect taxation.

Mr. MacLAREN: In the Debate on this Clause hon. Members seem to have been wandering into a sort of maze, and I have listened to the views expressed by some of my colleagues with a certain amount of apprehension. It seems to be the opinion of some hon. Members that when it is necessary to raise taxation all that it is necessary to do is to look about for people with money, and levy taxation upon them without considering what the ultimate consequences may be. That policy is one which has long been associated with almost every political party. The idea seems to be that if a man makes an income it is the function of the State to find out what he is making, and levy a tax on him in proportion to his income. It seems to be assumed that if a man has money he is a person who should be spotted by the
State and immediately sent off for execution by this particular weapon of taxation.
The question arises whether this tax will prove to be injurious to industry. Every tax you put upon wealth means a hindrance to the production of more wealth. Where does all taxation come from? All taxation is a deduction from wealth. An hon. Member opposite has said quite truly that when heavy taxation is imposed upon industry under the present canons of taxation sooner or later the worker feels the back-wash, because the blows of taxation are passed on to the lowest man in society. You may call high taxation by whatever name you like, but it is a deduction from the wealth produced by the hands and the brains of the workers of this country. I remember some of the speeches made by the Chancellor of the Exchequer in which he was very enthusiastic about the placing of heavy penalties on large incomes, and he was always in favour of doing something in the form of adjusting wealth by heavy taxation on high incomes. It is quite true that people with high incomes can generally manage to devise means by which they can pass on heavy taxation to other people. It may be true that the taxation which we are now discussing may have the effect in many instances of throwing more people out of work. In my view, there are only two sound principles upon which you can levy taxation—

Whereupon, the GENTLEMAN USHER OF THE BLACK ROD being come with a Message, the CHAIRMAN left the Chair.

Mr. SPEAKER resumed the Chair.

ROYAL ASSENT.

Message to attend the Lords Commissioners.

The House went; and, having returned, Mr. SPEAKER reported the Royal Assent to—

1. Public Works Loans Act, 1931.
2. National Economy Act, 1931.
3. Brighton Corporation Act, 1931.

FINANCE (No. 2) BILL.

Again considered in Committee.

[Captain BOURNE in the Chair.]

CLAUSE 7.—(Higher rates of income tax for 1931–32.)

Question again proposed, "That the Clause stand part of the Bill."

Mr. MacLAREN: I was saying that all taxes, by whatever names they may be called, are taxes leviable upon the wealth of those who possess fortunes merely through the maldistribution of the wealth produced. As long as the House of Commons ignores that basic fact, and as long as the canons of taxation are such that every Government believes it to be its right and duty to penalise men who make incomes, or men who have larger incomes than others, it is inevitable that we should be faced with such a situation as that which faces us now, when the finances of the country are breaking down, and devices have to be resorted to in order to find money to meet the emergency. I agree that the Chancellor of the Exchequer has been on more than one occasion left as an isolated figure in the House warning the country of the disaster that was coming. I knew, long before the Chancellor made his public pronouncement in the House that this crisis was inevitable. It was self-evident to any serious student of economics, and that this House should have dilly-dallied as it has done for years, as if there were not matters of consequence ahead, always has been to me an astonishing reflection on the mentality of this Chamber, if I may say so without disrespect.
I congratulate the Chancellor of the Exchequer on his courage in those days, and I should like to add that some of those who are sitting beside him to-night gave him but little encouragement or support when he was in that isolated position warning the country of the trouble that was coming on. I would say this also with regard to the present Prime Minister, who is asking us to assist in raising new revenues to meet these emergencies. For two years I sat on the benches behind the right hon. Gentleman, and I noticed how he seemed to carry on as though everything was all right and nothing was going to happen. It was left entirely to the Chancellor of the Exchequer to face the odium of the task of warning this State where it was
going. It would be out of order for me to go more deeply into this matter, but we have inevitably got into this trouble through our own carelessness and inability as representatives of the people of this country, and we cannot wonder at the attitude of men and women in the poorer orders of society. All that they know is that they have a great struggle to live. Their daily problem is how to meet rent, rates and the cost of food for their children during the coming week, and, in their condition of poverty, looking at the vast displays of wealth in other parts of our cities, they conclude that it is a holy and sacred thing for a Chancellor of the Exchequer to impose heavy taxation upon those whom these poorer people believe to be the controllers of vast fortunes.
The vicious consequences of blind and stupid taxation have driven almost every civilisation that the world has ever known into a. morass or a revolution. Let anyone examine item by item this Budget which the Chancellor of the Exchequer has been compelled to bring in wader the plea that it is an emergency Budget, necessary to meet the exigencies of the moment. Although the questions of unemployment, the breakdown in the exchanges, the Gold Standard, and so on, are deflecting public attention at the moment, no serious student of economics can deny that, although this Budget may be an emergency measure to raise money for the moment, its economic effect will he to put still further pressure on industry, and perhaps to bring about more unemployment. It is a sad reflection that 615 men who claim to be here as Members of the House of Commons are not attuned to what is implied by this taxation, not in the present year, or last year, or the year before, but over a vast series of years. You have continued to tax industry, you have continued to tax wealth, and you have only made the distribution of wealth more inhuman and more unjust.
As I have said, I do not agree with those who ask that more and heavier taxes should be levied on people with certain incomes, and who seem to think—I am not blaming them for it; perhaps they have not had time to study these matters—that the best thing to do is to put heavy taxation on men with fortunes but I and others, when we have stood alone in the House and asked the House
to come back to social justice and proper canons of taxation, have been jeered at. I remember being laughed at when I tried to bring the House back to a realisation that there was a just basis for taxation, and I said to the House, "Very well; do not listen to my suggestions with regard to taxation, but go your own merry way with your taxation on industry and your taxation on incomes, and, as sure as you are in this House, a crisis shall come upon you." It is with you now, and, while you may go on thinking that what some of us asked you to look at was merely a cranky notion of taxation, unless you change your canons of taxation the Budget that you are passing to-night is only the precursor of more serious Budgets that you will have in the future, and you will not be able to placate the disinherited and the unemployed when this House enacts heavier and more powerful exactions from the wealth of those whom you consider to be the better-off members of society. Therefore, while I have no enthusiasm for this tax as a tax, I do not agree with any of the speeches that have been made with regard to it from any quarter of the Committee. All of them have been indicative of muddle-headed thinking, merely accepting the old vicious canons as inevitable and rightful ways of raising money. If you go on like that, I say, "Good luck to you for the moment, but God help you in the future."

CLAUSE 8.—(Amendments of enactments relating to Income Tax reliefs.)

The DEPUTY - CHAIRMAN: The Amendment in the name of the hon. Member for West Leicester (Mr. Pethick-Lawrence)—in page 5, line 34, at the end, to insert the words
Provided that the provisions of section eight of the Finance Act, 1931, shall not apply in the case of any person whose assessment has been increased as the result of the operation of this sub-section and the income tax for which such person may he liable shall be payable in two equal instalments in accordance with the provisions of sub-section (2) of section one hundred and fifty-seven of the Income Tax Act, 1918, as originally enacted."—
is both out of place and out of order.

8.0 p.m.

Mr. PETHICK-LAWRENCE: May I suggest that this Amendment could be
called, for this reason. The effect of Clause 7 is to impose certain new burdens. Am I not entitled to ask that these burdens shall not be subject to the provisions of the previous Act of this year, because that Act makes these burdens very much more grievous than they otherwise would be. I submit that I am entitled to suggest that these new burdens should not be imposed in these unequal proportions.

The DEPUTY-CHAIRMAN: The hon. Gentleman is perfectly entitled to bring that forward as an argument why the Committee should not pass this Clause, but the Clause is governed by a financial Resolution in Ways and Means, which limits it to such Amendments as are consequential on any variations that may be made in the reliefs. The Amendment is not consequential on the variations, but is an Amendment in the Income Tax law as laid down in the Finance Act of this year and this is far beyond the scope of the Financial Resolution.

Motion made, and Question proposed, "That the Clause stand part of the Bin."

Mr. BENSON: When the Budget Resolution dealing with allowances was introduced a fortnight ago, we appealed to the Financial Secretary, who was in charge of the Resolution, to withdraw the scale of variations proposed and to replace them by a scale more in consonance with the general ideas of taxation that prevail in the country so that the burden of the tax should be more or less consonant with the power to bear it. Unfortunately, the Financial Secretary refused to amend the scale, and nothing is now left but to oppose the Clause. I do so on the ground that the various new burdens placed upon Income Tax payers by the alteration in the rate of allowances are indefensible if we judge by the test of ability to pay. I am not going to discuss the question of equality of sacrifice. I frankly do not know what that phrase means. But I know that equality of sacrifice cannot mean the placing of larger burdens upon smaller incomes. I am not going to discuss whether, for example, an increased burden of £21 on an income of £500 a year is a greater or a less burden than a tax
of £2,700 on an income of £50,000. It is practically impossible to compare those two figures, because they are incommensurables. One cannot argue about it without having any definite basis upon which to compare the relative sacrifices. Furthermore, the Chancellor can always make the reply, when one urges an increase of taxation upon higher incomes, that we may be approaching the point where an increase in tax may lead to diminishing returns. Whether we have reached that point or not I do not know. No one can say except the Board of Inland Revenue, and they can only make an estimate. I am going to base my case against this Clause in such a way that the Chancellor will not he able to use that argument. I am going to compare like with like.
The main gravamen of my charge is that the differentiation between the married and the single person has been reduced by these variations in allowances, whereas it ought to have been very materially increased. Take one item alone. Take an increased burden of £36, that falls upon a married man with three children when his income is at the rate of £800 a year. If you turn to a single man, you have to go down the scale until you come to an income of £1,600 before there is the same increase of burden. That is to say that the Chancellor, by his variation of these allowances, has put a similar burden on a married man with three children with £800 a year and a single man, without any encumbrances, with an income of £1,600. It may be said that the man who has £1,600 a year paid more tax to begin with than the married man with £800. That is true, but what was the tax under the last Budget on a single man with £1,600? It was £250. It still left him £1,350 to live on. A single man with £1,350 to live on after he has paid his tax can afford to bear a larger burden than a married man with three children with £800 a year. As a matter of fact, over and above the income of £700 a year the increased burden placed by the revision of the allowances on married men with children is in every case higher than the burden placed upon single men with similar incomes. These increased burdens, not relative but actual, which are put upon the married man are utterly and completely unjustified when compared with the burdens placed on a single man.
The position of the married man, and particularly the married man with children, is that already a, very large portion of the income is mortgaged well in advance, and mortgaged to expenses that he cannot reduce. The head of a family has to have a very much larger house, to start with, than a single man. He cannot live in a couple of rooms in comfort, as a single man can. A very large number, probably 70 or 80 per cent., of married men who are obtaining the benefit of children's allowances have been compelled to buy their houses and to mortgage them, and they are faced with such expenses as mortgage interest and amortisation charges. Another heavy item is life insurance. A single man has no responsibilities and no dependants and no need to insure his life. A married man with children is compelled to do so. Life insurance, particularly to a man with £800 or £1,000 a year, who is maintaining a certain position and who wishes to secure, at any rate, a competence for his wife and children, is a very heavy item in his expenditure. Here, again, I speak feelingly.
Anyone who has children knows what schooling costs. The cost of rearing a family is going up steadily, because parents are more and more realising the importance of first-class schooling and first-class health. They have far more doctors' and dentists' bills than they had. Children are becoming a greater and greater expense year by year, and it is an expense that the married man with children cannot suddenly contract. If he does, he is not merely curtailing his own comfort, but is curtailing something that is essential for the welfare of his children. A married man obviously has a far smaller margin out of which to pay the tax than a single man. It is impossible to say how much a married man spends solely on himself and how much on his family, but, if we say the average decent married man spends three-quarters of his income on his family and the other quarter on himself, we are probably understating the amount that he spends on the family. A single man has none of these burdens. He is an infinitely more taxable person. Sitting behind the Chancellor there are a large number of agricultural experts. When they want milk, do they go to a cow that has a calf, or do they go to a cow whose calf has been taken away? If
the Chancellor of the Exchequer wants mulch cows, let him go to those which are not suckling calves.
I will take the case of a single man. Frankly, no matter what range of income you take, the taxation which he pays is not serious, and the recent burden that has been placed upon him by the Finance Bill is negligible. Take a single man with £400 a year. After the last Budget of the Chancellor he was left with £380, out of which he is now asked to pay another £13—not a heavy burden. A single man with £1,000 a year after the April Budget was left with £875, and he is now asked to pay a further £27 10s. A single man with £2,000 a year, after paying taxation already imposed, has £1,688 left, and the burden to be placed on that sum is £46. A single man with £10,000 a year has, after all taxation, £6,500 left and out of that he is now asked to pay £384. To go to the largest figure that is given in the precious White Paper which has been issued, a single man with an income of £100,000 a year is left, after taxation, with £44,400, out of which he is now asked to pay £5,700. Compare the position of single persons with incomes I have given and the taxation which they pay with similarly placed persons who are married and responsible for children. There is really no comparison at all.
The Chancellor of the Exchequer may say that if he increased the taxation of the Super-tax payer, wholesale evasion would set in, and that the premium placed upon evasion would be so high that not even the skill of the Inland Revenue would be able to prevent wholesale evasion. What is the simplest and most common method of evading the high effects of aggregation? The settlement of an income upon the children. I know of cases where that has been done. It is a very common method and one which the Inland Revenue cannot meet. Probably there is more evasion—if I may use that phrase—of Super-tax by settlement of incomes upon children than by any other method. Obviously, we have not yet reached the point where high taxation is diminishing returns; otherwise, the Chancellor would not have increased taxation, because his object is revenue and not diminished returns. I pointed out earlier that the most fruitful source of evasion of taxation—the settlement of
income upon children, who will be the natural recipients eventually—is entirely closed to single men. Not only has the single man far leas incentive to avoid taxation, because obviously the general demands upon him are far less and he can afford more easily to meet increased taxation, but the simple and obvious means of evasion which the married man adopts are not there for him. The result is that the single man stands to be shot at, and, frankly, I have no objection to shooting at him. He can stand a good deal more taxation than he is standing, because a married man who is saddled with practically the same taxation, has an infinitely greater burden to bear.
We have now had placed before us a second Finance Bill in a year, due to a great crisis. Never was there a better opportunity for introducing a very drastic change along the lines which I have suggested for the taxation of those who are single and those who are childless. The childless married person can bear more taxation, and when I say childless, I mean childless, and not merely persons with children above the age limit. You have an opportunity to introduce a very drastic change in our method of allowances and placing burdens where they can far better be borne than can the burdens that have been imposed by the Chancellor of the Exchequer. I am sorry that he has not taken advantage of the opportunity. Instead of adjusting the burden and realising that among the childless couples and single persons there is a source of income which can be tapped more easily and with less hardship than in the case of the married person, he has taken practically the opposite line. He has increased the burden that falls upon the already overburdened married person, and for that reason I shall strongly oppose the Clause.

Miss RATHBONE: I thought of laying before the Committee some of the calculations that have been so admirably put forward by the hon. Gentleman the Member for Chesterfield (Mr. Benson), but he has dealt with the detailed financial effects of the diminution in family allowances and rebates to children that I will not trouble the Committee by repeating anything he has
said. I will confine myself to saying how completely I am in agreement with him. The whole of this Bill—and I think that the same may be said of the Economy Bill which received its Third Reading last night—falls with special severity upon parents, and upon parents of the middle-class. If the right hon. Gentleman the Chancellor of the Exchequer were not supported by the cohorts of the Conservative party, we might have imagined that his proposals in this Finance Bill were inspired by an almost Russian detestation of the petit bourgeoise, for the proposals of the Bill will hit with very great severity especially the families of the middle-class who are engaged in commercial and professonal occupations.
The man with an income of between £400 and £1,000 a year, who pays Income Tax at the standard rate and has hitherto reduced the standard rebate on account of his children and dependants, seems to bear the heavy share of the burden of this Bill, and to be the greatest scapegoat in regard to the economies to be effected, with the possible exception of the unemployed man. Many of the professional men who are parents and who belong to the middle ranges of income are connected with those occupations which are going to be heavily hit by the cuts in the Economy Bill—teachers, civil servants, and Army and Navy officers, All of them are hit by direct cuts in income under the Economy Bill, and they are just the people who will feel most heavily this decrease in the rebates that they have hitherto enjoyed on account of being parents.
These people find it hardest to readjust their standard of living to meet these heavy inroads upon their income. Many of them experience the sheer impossibility of renting a house to-day. The well-to-do artisan can usually rent a house which is subsidised fairly substantially out of the rates, and is owned by the municipality. The rich can buy their own houses, but the middle-classes, the professional business man, generally has to buy his house on mortgage and to meet his instalments. He enjoys no advantage from the system of free education in this country. He has heavy school fees to pay for his children, and now, with less than three weeks' warning, he is asked to bear these heavy direct cuts in
his income under the Economy Bill, followed by the blow of the decreases in the rebates for his wife, children and other dependants.
I wish the Chancellor of the Exchequer could have seen his way to increase the rebates for children rather than to decrease them. I do not suppose that he or any other hon. Member has found much time during the last few days to listen to the discussions that have been going on in the British Association. In the discussions on the subject of population we have heard the eugenists lamenting over the great fall in the British birthrate among the intelligentsia, and our steadily increasing differential birthrate, which remains heavy among the submerged tenth. The fall in the birthrate has come upon the middle and professional classes until the rate is far below that of any other country in Europe, except Denmark. We are suffering from a very low birthrate and not only are we taking no steps to put the birthrate right among the educated classes but we are apparently doing everything we can to give it a further push. This excessively low birthrate among the educated classes increases the differentiation of the birthrate as between the different classes. The professional men who have a high standard for their children are finding themselves more and more unable to indulge in the luxury of parentage.
I deeply deplore this particular feature in the Finance Bill. I do wish that in this respect we could have followed the lines that have been adopted in continental countries. It is a curious fact that France and Belgium during the last two years, when they were beginning to feel severe economic pressure, which reached them almost last in Europe, took steps to deal with this matter. During the past year in France steps were taken, although the Bill is not yet through, and in Belgium a Bill passed last year, to compel the employers to pay allowances in respect of children, because they recognised that a time of economy, when it is necessary to make every penny go as far as possible, and to restrict expenditure very severely, was just the time when the burden of these economies would fall heavily upon those who had families to keep, and they realised that that involved a real danger to the future of the race. I deplore this particular feature in the Budget, and if
the matter is pressed to a Division I shall vote against a reduction in the rebates.

Mr. ARNOTT: Comments have been made on the inadequate increases of taxation in regard to the higher incomes. We are now confronted with a reversal of policy so far as the Chancellor of the Exchequer is concerned. Up to now it has been generally recognised that married people with children should have more generous allowances than single people. We find, however, that the reverse procedure has been followed in this Bill. The hon. Member for Chesterfield (Mr. Benson) has called attention to the matter. I will take an income of £1,500 a year. A single man with such an income will have to pay an extra tax of £33 10s., whereas a married man with no children will have to pay an extra tax of £41 5s. A married man with one child will pay £42 5s., and a married man with three children £44 15s., which means an excess tax over the single man of £11 5s. These are the net figures in the Budget, but the proportion holds good if we take the figures that are given in the White Paper. If we take the computation given in the final column of the White Paper and compare it with the computation that I have made, the result is the same. The married man with three children has not only to pay a proportionate increase, but he has to find £11 5s. for occupying that position. Such an imposition requires some defence and it will be interesting to hear what the representative of the Government has to say about the increased charge upon the married man, seeing that it is so much greater than the tax upon the single people.
I should like to know if the explanation that was given by the Financial Secretary to the Treasury applies to this as well as to the preceding Clause. We were told that it was wrong to calculate increases as between the tax paid now and the tax that will be paid when this Bill becomes law. We are told that we should take as our basis the first Budget that was brought in by the right hon. Member for Epping (Mr. Churchill). We were told by the Financial Secretary that the Chancellor of the Exchequer was not only a capable Chancellor but that he was something in the nature of a prophet; that he foresaw all that is happening now when he took his seat on those
benches in 1930. We have been told that the crisis began then, that the emergency began then, and that the taxes levied then were in preparation for the present crisis.
I should like to know whether the right hon. Gentleman also foresaw the alteration that he was going to make in the allowances, because when we look at the allowances between the years 1929–30 and 1930–31 we find that they have been increased, and consequently the taxes upon the lower middle classes have practically been retained at the same level. It was reduced by a very small sum in regard to one class of income—there was an addition of 6d. in the Income Tax, but the actual money contribution paid by the people receiving that income was reduced. If the present crisis could have been foreseen then, some contribution could have been made at that period, but no contribution was made. The Chancellor of the Exchequer boasted at that time, and was cheered by the party with whom he was then associated, because it was in accordance with the principles which he had always professed and which we had professed, that the taxation imposed on the lower middle-classes was already severe enough and that the bulk of the taxation should be imposed on those much more fortunate. That was the principle in the Budget of last April, and if all these things were foreseen, if the emergency really began then, why was it that the Chancellor of the Exchequer was simply content to give a warning? If it was not foreseen then the argument of the Financial Secretary is beside the point.
One defence made by the Financial Secretary has much more validity. It was the most honest and straightforward defence that has yet been made for these proposals. The hon. and gallant Member attributed to me a belief that wealthy people could have their taxation increased indefinitely without any prejudicial results. I never made any such statement, nor did I use any argument which would convey that impression. The argument put forward in defence of these proposals roughly was that the limit of taxation was being reached by wealthy people and, therefore, some other people would have to pay much more. That is a straight-
forward Conservative argument which we can appreciate. The Government ought to say: "This is not the time for equality of sacrifice; we have taxed the rich enough, we have reached the limit there, and, therefore, the sacrifice that has to be made in the future will not be in proportion to means at all. We are going to reverse the process and lower the exemption limit until everybody is paying Income Tax at a much higher level than now." That is the implication of the argument used by the Financial Secretary and I congratulate him on having let the cat out of the bag and stated clearly what is the policy of the party.

Lieut.-Colonel Sir WILLIAM ALLEN: I only want to ask the Chancellor of the Exchequer one or two questions. We have often heard the phrases "equality of sacrifice" and "capacity to pay" during these Debates, and I want to ask the Chancellor of the Exchequer a question in reference to the inequality of sacrifice as between a single person and a married person. I have some figures here which seem to me to show an inequality in the sacrifice as between these two persons. A single person with an income of £300 per year is liable to an increase in the tax payable of 52 per cent. Take the case of a married person with £300 a year, the increase he has to pay is 350 per cent. That seems to me a most extraordinary condition of affairs. The married person who is less capable of paying is being asked to pay 350 per cent. more, as compared with a single person, who is only asked to pay an increase of 52 per cent. Take the case of a single person with an income of £600 per year. His increase is 44 per cent. while a married person with an income of £600 per year is asked to pay an increase of 100 per cent. Surely there is something inequitable about this, and I hope the Chancellor of the Exchequer will give us a satisfactory explanation or take means to secure a greater equality of sacrifice.

Mr. PETHICK-LAWRENCE: The hon. Member for Chesterfield (Mr. Benson) and those who have followed him, including the hon. and gallant Member for Armagh (Sir W. Allen), have made out, it seems to me, an unanswerable case that the proposals as they stand are not fair. It is not reasonable that smaller
people should have to bear such a greater proportional burden than larger people, and it is not fair that a married man, with all the responsibilities which parentage involves, should have to bear a greater burden in proportion than a single man. But I am not sanguine enough to suppose that these arguments, however powerful, will give us a majority in the Division Lobby in our opposition to this Clause, and I do not rise, therefore, mainly for the purpose of supporting these arguments, because they need no reinforcement; they stand unchallenged. The case I desire to plead is one which I believe will move even the stony hearts of right hon. Members opposite. The Committee will remember that last April the Chancellor of the Exchequer introduced a provision into the Finance Act of this year altering the proportion of instalments to be paid on the let January and the 1st of July for certain classes of Income Tax payers. Whereas the proportion had hitherto been on the percentage of 50 and 50 it was changed to a percentage proportion of 75 and 25, or from half and half to three-quarters and one-quarter respectively.
That alteration aroused considerable opposition among the ranks of hon. Members who now sit opposite. They are not here at the moment, or at least only one or two are present, and they may perhaps give their votes to reverse the attitude they took a few months ago. We on this side were supporting this proposal. The Chancellor of the Exchequer apparently sees something humorous in that, and I would remind him that the conditions then were totally different from what they are now. The Chancellor of the Exchequer was not then imposing any additional Income Tax, and the burden that was being inflicted by the change that was proposed was in lieu of any addition to the Income Tax. They were asked to bear this burden in order to save themselves from the much greater burden of an increase in the standard rate of the tax. Taking all that into account and the size of the tax, we felt then, and I supported it, that it was not an unfair proposition to make. But now the whole situation is completely changed, because on all these people in the lower range of Income Tax, and particularly on the married couples with
children, there has been imposed an enormous additional burden.
In view of these facts, I ask that the Chancellor of the Exchequer should reconsider the alteration in the percentage of instalments. Let me draw attention to what are the actual increases which the taxpayers of this class will be called upon to meet next January. I am sure that the hon. and gallant Member for Armagh (Sir W. Allen) will realise that this is a very considerable reinforcement of the argument that he very properly put before the Committee. Take the case of a married couple with an investment income of £600 a year and with three children. Before this Bill was brought in that couple had to pay a total tax of £21 10s. a year. The payment was made in half-yearly instalments of a little under £11 each. The effect of the Chancellor's proposals last April was that instead of paying next January and next July instalments of £11 each, they will pay about £15 10s. in January and about £5 10s. in July. That was a hardship but not a very serious hardship.
But what is the position to-day? This couple will have its Income Tax put up from £21 10s. to no less than £58. What is to be the effect on the instalments? Hitherto those instalments have been a little under £11 each. Under this Bill the married couple are to be asked to find next January no less than three-quarters of £58, that is to say £44. So they are suddenly to be confronted with a demand for an instalment increased by no less than £33. No hon. Member can look upon that as a reasonable thing to suggest. The case is very similar if we take a man and wife and three children, with an earned income of £800. Whereas before they had to pay £32, they now have to pay £68. And whereas the instalment would be £16 each, now it is to he £50 in January, or an increase of no less than £34. I put it to the Chancellor that here is something which ought to be dealt with. There is a case for some adjustment, and I hope that the right hon. Gentleman will tell us what that adjustment is to be. We have had already some indication in the Press that though there is not to be any change in the law, the first instalment need not be all paid in January, but may be spread over January, February and March. If that
is all the relief that the Chancellor is going to promise to-night to this class of people, I say here and now that in my view it is totally inadequate.

The CHAIRMAN: The hon. Member has been quite in order hitherto in referring to the hardship of these people having to pay such a large proportion in one instalment, but I should not be in order if I allowed the Chancellor of the Exchequer to deal with the question of making an alteration in the law. We are dealing with the law as it stands, and there is no Financial Resolution which allows that state of law to be altered by this Bill.

Mr. PETHICK-LAWRENCE: I shall be sorry if you rule it out of order for the Chancellor of the Exchequer to reply. I hope you will allow the Financial Secretary to make some statement, possibly briefly, in order that the Committee may know what is certainly very important. The situation is simply this: We are complaining of the very severe burden which this Clause of the Bill imposes. It is not unreasonable to say that the burden will be very much increased by reason of the provision in the previous Finance Act of this year. I hope you may find yourself able to allow the Chancellor to explain how far the provision imposed in this Bill will necessitate heavy burdens next January. I have practically finished what I wanted to say. I feel that, great as are the burdens imposed in this Clause, even if we had not carried Section 8 of the Act of this year, these burdens will be still more severe in consequence of this provision, and I hope that the Chancellor of the Exchequer, if he cannot see his way to modify the burdens as a whole, will at least be able to afford some relief in the method of their imposition.

The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden): The most remarkable feature of this Debate has been the observable absence of the right hon. Member for Central Edinburgh (Mr. W. Graham), whose name stands at the head of the Amendment. I expected that upon this Clause at any rate I should receive his enthusiastic support, because in the Clause I have adopted a recommendation which he made in the official organ of the Labour party a few weeks ago—a recommendation
which he said would be accepted by nine-tenths of the Labour party. Apparently, the right hon. Gentleman has concluded that absence is the better part of valour. The hon. Gentleman who moved the Amendment said that the gravamen of his complaint was that married men and married men with children were unfairly dealt with in comparison with single men. The hon. Member almost conveyed the impression that he was waging a vendetta against the single man who would not fulfil his social obligations.
We have had a lot of figures given of the percentage increase in the tax to be paid by the single man and the increase in the tax to be paid by the married man. These comparisons are altogether fallacious. For instance, suppose that a single man is paying £50 a year now. Assume that this man who is paying £50 a year has his tax increased to £100 a year. That is an increase of 100 per cent. Assume that a person who is paying £1 per year in taxation has his tax raised to £3 per year. That is an increase of 200 per cent. He only pays £3 a year, but his increase is described as an increase of 200 per cent., whereas in the case of the man whose payment has been increased by only 100 per cent. the actual amount of the increase is £50. That illustrates the fallacy which runs through all the arguments employed by the Opposition during this discussion. The sole reason why there is a plausible case for alleging that there is unfair discrimination against the married man as compared with the single man is because the married man hitherto has been most generously treated in comparison with the single man. I have been very much interested at the concern shown by hon. Members opposite for the man with an income of £1,000 to £1,500 a year. They have assumed the custodianship of the interests of the people with incomes within that range, but I have heard scarcely a word in the course of the Debate about the people with incomes of from £250 to £300 or even £500 a year.
Take one or two illustrations, making comparisons not of percentages of increases but of the actual figures of increases. I shall take the case of a single man with a certain income and compare him with the married couple whose income is of the same amount. Take the case of the married man with, say, three
children, which is the case mentioned particularly by the hon. Gentleman who moved this Amendment. At the present time the married man with three children who has an income of £400 a year does not pay a single penny of taxation. He is now going to pay £5. I do not know what is the percentage of an increase of £5 upon nothing. The hon. Gentleman the Member for West Leicester (Mr. Pethick-Lawrence) had a distinguished mathematical career in the university and probably he would be able to give us the percentage of an increase from nothing to £5. At any rate, that again shows the fallacy running through all the illustrations given on the other side in the course of the Debate. Is an imposition of £5 upon a man with an income of £400 a year unjust or not? If such a man has been a non-smoker and a tee-totaller he has not been contributing anything, except perhaps through the Sugar Duty to the taxation of the country.

Mr. MARLEY: Will you give him a rebate if he takes to smoking and drinking?

9.0 p.m.

Mr. SNOWDEN: That is purely voluntary and an act of choice on his part, but in the case of the Income Tax there is no choice in the matter. Then take the single man with an earned income of £500 a year. At the present time he is paying £32 2s. 6d. as compared with the married man with three children and with the same income who at the present time is paying £3 3s. 4d. I think it is because of the generous way in which the married man has been treated in the past and the way in which he has been let off the payment of any taxation at all up to a comparatively large income, which has made possible the plausible but altogether unfair contrast drawn between the increases in the two eases. It should be remembered that the term "single man" in this case includes "single woman." It is the single person not the single man whose case we have to consider although the hon. Gentleman who moved the Amendment always spoke of the "single man." He is entirely wrong when he assumes that all single men have no responsibilities. A great many single men live with and support their parents and where they have to take lodging or apartments their expenses are not altogether out of proportion to the expenses of the married man.
There is another consideration. I suppose that most single men are contemplating marriage, and I imagine that in that case they are making provision by saving for their marriage—at any rate, it is their duty to do so. The hon. Lady the Member for the English Universities (Miss Rathbone) ought to have been aware of that. I admit that she did not stress the comparison between single persons and married persons to the extent to which the hon. Member for West Leicester did so, but I would remind her that there must be tens of thousands if not hundreds of thousands of single women in employment in this country living away from their own homes who have to bear heavy expenses as well as maintain themselves. Therefore, it is quite unfair to suggest that single persons have no responsibilities beyond paying their own personal expenses.

Miss RATHBONE: Will the right hon. Gentleman permit me to point out this difference between the single man and the single woman? The single woman gets an income based on her needs as a single woman, but the single man claims and usually gets a rate of salary or wages based on the assumption that he is a married man with a family to keep.

Mr. SNOWDEN: I know of course that that is a bee in the hon. Member's bonnet, and I know her advocacy of all-round family allowances. I think I have now touched all the points raised in this discussion, but there is one point which I think has never been mentioned in the Opposition speeches to which I should like to refer, and that is the increase in the amount of the earned income allowance which I am making in this Budget.

Mr. ARNOTT: The biggest benefit to the highest income.

Mr. SNOWDEN: We give the benefit just where it is needed, and, if the hon. Member, who has shown his ignorance of this question on many occasions in the course of this Debate, will acquaint himself with the facts he will find that when we get to a certain point in incomes the effect of all allowances disappears. I believe that I mentioned in my Budget speech that the allowances are very much higher than those recommended by the right hon. Gentleman the Member for Central Edinburgh about 11 years ago. He was a member of the Royal Commission on Income Tax. The Royal
Commission recommended an allowance of £36 for the first child and £27 for each subsequent child. These allowances at the present time are almost double those that were recommended by the Royal Commission, and the Royal Commission also said that they did not regard those figures of allowances, which were fixed at that rate because of the high cost of living at that time, as final, but recommended that if there were a substantial change in regard to that matter, those allowances should be reconsidered. But the allowances now proposed are still nearly double those recommended by the Royal Commission of 11 years ago. So much for the point of this Amendment. You ruled, Sir Dennis, that I should not be in order in replying to any points with regard to the instalment plan of paying Income Tax which would involve legislation, but should I be in order in making a statement in regard to administrative changes?

The CHAIRMAN: Certainly. I allowed the hon. Member who raised this point to refer to the hardship which he was suggesting to the Committee, and I said that it would be perfectly proper for the Chancellor of the Exchequer to deal with it in so far as it was not a question actually involving legislation.

Mr. SNOWDEN: What I shall have to say on this matter will not involve legislation. My hon. and gallant Friend the Financial Secretary intimated the other day that we had under consideration some measure by which we might be able to mitigate to a certain extent the undoubted hardship that will be felt under the changes in respect of the Finance Bill in the early part of next year, by which, instead of paying the first half of the Income Tax in January and the second in July, three-quarters must be paid in January and the remaining quarter in July. There is some measure of force in the point that was put by the hon. Member opposite, that the increased burden which was imposed by the increase in the Income Tax has rather altered the position, and I am prepared to meet it as far as I am able to do so. Of course, the imposition of this increased Income Tax has come rather late in the year. If it had been
imposed in the first half of the year the Income Tax payer would have had nearly 12 months in which to make preparations to pay the tax. It will be remembered that I estimated in April that the alteration in the instalment plan of paying Income Tax would bring in about £10,000,000. The increase that I am now proposing will, of course, make that sum very much bigger, and the balancing of the Budget depends on my getting in the whole of this revenue before the end of the financial year.
The hon. Member who spoke last said that he would not regard merely administrative concessions as being adequate to meet what he described as the hardship of these cases. I am not prepared to do anything by legislation, but I am quite willing to do something to meet cases of exceptional hardship. I propose that the Commissioners of Inland Revenue should issue special instructions to the collectors of taxes for dealing with cases of special hardship. This will not be a general and universal concession, but each case will have to be governed by the facts and circumstances of the individual instance, and no hard-and-fast line can be drawn.
There are two other points that I want to make so that there can be no possible misunderstanding on this matter, but before mentioning those two points, may I say this: I have had a great many letters from people who make the suggestion that the Income Tax might be paid, say, by means of postage stamps, so that, in anticipation of the payment of the Income Tax at the end of the financial year, a person should have prepared for that payment and should then be able to hand in his card in payment of the tax. I do not think that is either a practicable or wise course to adopt. There are other means by which the Income Tax payer can make preparation. There is no reason, for instance, why if he wants to be prepared by weekly or monthly savings he should not put them in the Post Office, where in the meantime they will be earning money, and they can be drawn out almost without notice when the Income Tax payment becomes due; or, if he has a banking account, he can place a sum from time to time in his bank on deposit account.
In regard to those two points that I wanted to make, the first is that, al-
though in any case of hardship consideration will be shown, it must be clearly understood that the three-quarters instalment must be paid well before the end of the financial year, and the second point—this does not affect only the class with whom I have been dealing, but affects the Income Tax-payers generally—is that we ought to realise, especially at a time like this, the importance of the prompt payment of the tax wherever possible. The tax is due on the 1st January, and it is of the utmost importance to the Exchequer that it should be collected as early as possible after that date, and I want to take advantage of this opportunity of appealing to all taxpayers, whether they are companies or individuals, whether they are large taxpayers or small taxpayers, to help the Exchequer by making the utmost effort to pay their Income Tax as soon as may be practicable. It is very important—indeed, it is quite a necessity—that we must balance this year's accounts, and I am confident that I can rely upon the great body of Income Tax and Surtax payers to give this degree of help in achieving that very desirable end.

Sir W. ALLEN: The Chancellor has dealt with earned incomes. Take the case of a widow with a slender income. Bow is that case to be dealt with supposing the income is paid half-yearly, and the first instalment is paid in January? 1s the 5s. in the £ to be deducted at the source?

Mr. SNOWDEN: Certainly, if it is investment income it will be deducted at the source. The hon. Member has probably in mind the question whether she will pay 4s. 6d. or 5s. Under the arrangements in the Bill companies by whom the income will be paid will, where necessary, adjust the tax so that she will have paid at 5s. for the whole year.

Mr. MARLEY: From what the Chancellor has just said, it appears that only individual cases of hardship will be dealt with by the collectors. Can associations put forward cases showing that large numbers of their members will be hard hit? Will the right hon. Gentleman consider that?

Mr. SNOWDEN: I do not see how a case can be made out by an association
of members, as it could not be aware of the particular circumstances of individual cases.

Mr. MUGGERIDGE: In the case of the two half-yearly payments to a woman receiving an annuity, the tax is deducted at source. Will the first instalment of the annuity have deducted from it three-quarters of the tax and the second instalment a quarter, or will it be deducted equally each half year?

Mr. SNOWDEN: The hon. Gentleman evidently does not understand it. The three-quarters will only be paid where there is a direct assessment of the individual.

Mr. EDE: I want to follow the point made by the hon. Member for North St. Pancras (Mr. Marley), In the case of the teachers, for instance, they are suffering a substantial reduction of income unexpectedly between now and the 1st January, and a very large number, especially of the younger teachers, will be paying Income Tax for the first time quite unexpectedly owing to the alteration in the allowances. Would it not be possible to make it quite plain that persons, such as those who out of three months' reduced income will have to find a tax which they did not expect to have to pay at all, should be regarded as a class which might come within the statement that has been made by the right hon. Gentleman? Are we to understand, if that be so, that the assessment of what is a hard case is to be left to the collector, and that he is to decide whether Mr. A or Mr. B is a hard case? Exactly what guidance is to be given to the collector as to the way in which these cases are to be dealt with?
The right hon. Gentleman has quite rightly made an appeal to all taxpayers to pay by the 31st March—[HON. MEMBERS: "The 1st January."] He certainly made an appeal to them to pay as promptly as possible, but I gather that he desires to get the whole of this tax, hard case or not, within the financial year, but that he recognises that there are some people, undefined at the moment, who will find it difficult, if not impossible, to make the payment on the 1st January. If he could give these people an idea that if they met their obligations before the end of the financial
year clemency would be extended to them, I am sure that the right hon. Gentleman would find that they would be in a better spirit to meet his appeal than they would be if they are left in doubt as to whether the collector will regard them as hard cases.

Mr. SNOWDEN: It will be quite impracticable to extend the concession to a class. In the class which the hon. Member has mentioned, there may be a large number of cases, and no doubt there are, who will be able to pay the three-

quarters of the tax in January. Instructions will be sent out before the 1st January to all collectors in regard to this matter, and I think that we may trust the collectors to interpret their work in a generous spirit. They are people who in a great majority of cases have some local knowledge, and are acquainted with the cases of the individual taxpayers.

Question put, "That the Clause stand part of the Bill."

The Committee divided: Ayes, 262; Noes, 189.

Division No. 507.]
AYES.
[9.22 p.m.


Acland-Troyt, Lieut.-Colonel
Cranborne, Viscount
Hannon, Patrick Joseph Henry


Aitchison, Rt. Hon. Craigle M.
Crichton-Stuart, Lord C.
Harbord, A.


Albery, Irving James
Croom-Johnson, R. P.
Hartington, Marquess of


Alexander, Sir Wm. (Glasgow, Cent'l)
Culverwell, C. T. (Bristol, West)
Harvey, Major S. E. (Devon, Totnes)


Allen, Sir J. Sandoman (Liverp'l., W.)
Cunliffs-Lister, Rt. Hon. Sir Philip
Henderson, Capt. R. R. (Oxf'd, Henley)


Allen, Lt.-Col. Sir William (Armagh)
Dalkeith, Earl of
Heneage, Lieut.-Colonel Arthur P.


Ashley, Lt.-Col. Rt. Hon. Wilfrid W.
Dalrymple-White, Lt.-Col. Sir Godfrey
Hennessy, Major Sir G. R. J.


Aske, Sir Robert
Davidson, Rt. Hon. J. (Hertford)
Hills, Major Rt. Hon. John Waller


Astor, Maj. Hon. John J. (Kent, Dover)
Davies, Dr. Vernon
Hope, Sir Harry (Forfar)


Atholl, Duchess of
Davies, E. C. (Montgomery)
Hore-Belisha, Leslie


Baldwin, Rt. Hon. Stanley (Bewdley)
Davies, Maj. Geo. F. (Somerset, Yeovil)
Horne, Rt. Hon. Sir Robert S.


Balfour, George (Hampstead)
Davison, Sir W. H. (Kensington, S.)
Howard-Bury, Colonel C. K.


Balfour, Captain H. H. (I. of Thanet)
Dawson, Sir Philip
Hurd, Percy A.


Balniel, Lord
Denman, Hon. R. D.
Hurst, Sir Gerald B.


Beamish, Rear-Admiral T. P. H.
Despencer-Robertson, Major J. A. F.
Inskip, Sir Thomas


Beaumont, M. W.
Dixon, Captain Rt. Hon. Herbert
Iveagn, Countess of


Bellairs, Commander Carlyon
Duckworth, G. A. V.
Jones, Llewellyn-, F.


Bennett, Sir E. N. (Cardiff, Central)
Dudgeon, Major C. R.
Jones, Sir G. W. H. (Stoke New'gton)


Berry, Sir George
Dugdale, Capt. T. L.
Jones, Henry Haydn (Merioneth)


Betterton, Sir Henry B.
Eden, Captain Anthony
Jones, Rt. Hon. Leif (Camborne)


Birchall, Major Sir John Dearman
Edge, Sir William
Kedward, R. M. (Kent, Ashford)


Boothby, R. J. G.
Edmondson, Major A. J.
Kindersley, Major G. M.


Bowyer, Captain Sir George E. W.
Elliot, Major Walter E.
Knight, Holford


Boyce, Leslie
England, Colonel A.
Knox, Sir Alfred


Bracken, B.
Erskine, Lord (Somerset, Weston-s. M.)
Lamb, Sir J. Q.


Braithwaite, Major A. N.
Evans, Capt. Ernest (Welsh Univer.)
Lambert, Rt. Hon. George (S. Molton)


Briscoe, Richard George
Everard, W. Lindsay
Lane Fox, Col. Rt. Hon. George R.


Broadbent, Colonel J.
Falle, Sir Bertram G.
Latham, H. P. (Scarboro' & Whitby)


Brown, Col. D. C. (N'th'l'd., Hexham)
Ferguson, Sir John
Law, Sir Alfred (Derby. High Peak)


Brown, Ernest (Leith)
Fielden, E. B.
Lewis, Oswald (Colchester)


Brown, Brig.-Gen. H. C. (Berks, Newb'y)
Fison, F. G. Clavering
Little, Graham-, Sir Ernest


Buchan, John
Foot, Isaac
Llewellin, Major J. J.


Buchan-Hepburn, P. G. T.
Ford, Sir P. J.
Locker-Lampson, Rt. Hon. Godfrey


Bullock, Captain Malcolm
Forestier-Walker, Sir L.
Locker-Lampson, Com. O. (Handsw'th)


Burgin, Dr. E. L.
Fremantle, Lieut.-Colonel Francis E.
Long, Major Hon. Eric


Butler, R. A.
Galbraith, J. F. W.
Lovat-Fraser, J. A.


Cadogan, Major Hon. Edward
Gault, Lieut.-Col. A. Hamilton
Lymington, Viscount


Caine, Hall-, Derwent
George, Major G. Lloyd (Pembroke)
MacDonald, Rt. Hon. J. R. (Seaham)


Campbell, E. T.
George, Megan Lloyd (Anglesea)
MacDonald, Malcolm (Bassetlaw)


Carver, Major W. H.
Gillett, George M.
Macdonald, Capt. P. D. (I. of W.)


Cattle Stewart, Earl of
Gilmour, Lt.-Col. Rt. Hon. Sir John
Maclean, Sir Donald (Cornwall, N.)


Cautley, Sir Henry S.
Glassey, A. E.
Macpherson, Rt. Hon. James I.


Cayzer, Sir C. (Chester, City)
Glyn, Major R. G. C.
Macquisten, F. A.


Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.)
Gower, Sir Robert
Maitland, A. (Kent, Faversham)


Cazalet, Captain Victor A.
Graham, Fergus (Cumberland, N.)
Makins, Brigadier-General E.


Chadwick, Capt. Sir Robert Burton
Granville, E.
Margesson, Captain H. D.


Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)
Grattan-Doyle, Sir N.
Marjoribanks, Edward


Chamberlain, Rt. Hon. N. (Edgbaston)
Gray, Milner
Markham, S. F.


Chapman, Sir S.
Greaves-Lord, Sir Walter
Mason, Colonel Glyn K,


Christie, J. A.
Greene, W. P. Crawford
Merriman, Sir F. Boyd


Clydesdale, Marquess of
Grenfell, Edward C. (City of London)
Millar, J. D.


Cobb, Sir Cyril
Gretton, Colonel Rt. Hon. John
Milne, Wardlaw-, J. S.


Cockerill, Brig.-General Sir George
Griffith, F. Kingsley (Middlesbro' W.)
Mitchell, Sir W. Lane (Streatham)


Cohen, Major J. Brunel
Gunston, Captain D. W.
Monsell, Eyres, Com. Rt. Hon. Sir B.


Collins, Sir Godfrey (Greenock)
Hacking, Rt. Hon. Douglas H.
Moore, Lieut.-Colonel T. C. R. (Ayr)


Colman, N. C. D.
Hall, Lieut.-Col. Sir F. (Dulwich)
Morris-Jones, Dr. J. H. (Denbigh)


Colville, Major D. J.
Hamilton, Sir George (Ilford)
Morrison, W. S. (Glos., Cirencester)


Conway, Sir W. Martin
Hamilton, Sir R. (Orkney & Zetland)
Muirhead, A. J.


Carper, A. Duff
Hammersley, S. S.
Nall-Cain, A. R. N.


Courthope, Colonel Sir G. L.
Hanbury, C.
Newman, Sir R. H. S. D. L. (Exeter)


Newton, sir D. G. C. (Cambridge)
Russell, Richard John (Eddisbury)
Suetar, Rear-Admiral M. F.


O'Connor, T. J.
Samuel, A. M. (Surrey, Farnham)
Thomas, Rt. Hon. J, H. (Derby)


Oliver, P. M. (Man., Blackley)
Samuel, Rt. Hon. Sir H. (Darwen)
Thomson, Mitchell-, Rt. Hon. sir W.


Oman, Sir Charles William C.
Samuel, Samuel (W'dsworth, Putney)
Titchfield, Major the Marquess of


Ormsby-Gore, Rt. Hon. William
Sandeman, Sir H. Stewart
Todd, Capt. A. J.


Owen, Major G. (Carnarvon)
Sassoon, Rt. Hon. Sir Philip A. G. D.
Train, J.


Penny, sir George
Savery, S. S.
Tryon, Rt. Hon. George Clement


Percy, Lord Eustace (Hastings)
Scott James
Turton, Robert Hugh


Perkins, W, R. D.
Shakespeare, Geoffrey H.
Vaughan-Morgan, Sir Kenyon


Peto, Sir Basil E. (Devon, Barnstaple)
Shepperson, Sir Ernest Whittome
Wallace, Capt. D. E. (Hornsey)


Power, Sir John Cecil
Simms, Major-General J.
Ward, Lieut.-Col. Sir A. Lambert


Pownall, Sir Assheton
Simon, E. D. (Manch'ter, Withington)
Warrender, sir Victor


Purbrick, R.
Simon, Rt. Hon. Sir John
Waterhouse, Captain Charles


Pybus, Percy John
Skelton, A. N.
Wayland, Sir William A.


Ramsay, T. B. Wilson
Smith, Louis W. (Sheffield, Hallam)
Wells, Sydney R.


Ramsbotham, H.
Smith, R. W.(Aberd'n & Kinc'dine, C.)
White, H. G.


Rawson, Sir Cooper
Smith-Carington, Neville W.
Williams, Charles (Devon, Torquay)


Reid, David D. (County Down)
Smithers, Waldron
Wilson, G. H. A. (Cambridge U.)


Remer, John R.
Snowden, Rt. Hon. Philip
Windsor-Clive, Lieut.-Colonel George


Rentoul, Sir Gervals S.
Somerset, Thomas
Winterton, Rt. Hon. Earl


Rhys, Hon. C. A. U.
Somerville, A. A. (Windsor)
Womersley, W. J.


Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Somerville, D. G. (Willesden, East)
Wood, Rt. Hon. Sir Kingsley


Roberts, Sir Samuel (Ecclesall)
Southby, Commander A. R. J.
Wood, Major McKenzie (Banff)


Robinson, Sir T. (Lancs, Stretford)
Spender-Clay, Colonel H.
Wright, Brig.-Gen. W. D. (Tavist'k)


Rodd, Rt. Hon. Sir James Rennell
Stanley, Lord (Fylde)
Young, Rt. Hon. Sir Hilton


Rosbotham, D. S. T.
Stanley, Hon. O. (Westmorland)



Ross, Ronald D.
Steel-Maitland, Rt. Hon. Sir Arthur
TELLERS FOR THE AYES.—


Ruggles-Brise, Colonel E.
Stuart. Hon. J. (Moray and Nairn)
Captain Austin Hudson and Viscount




Elmley.


NOES.


Adamson, Rt. Hon. W. (Fife, West)
Groves, Thomas E.
March, S.


Adamson, w. M. (Staff., Cannock)
Grundy, Thomas W.
Marcus, M.


Alexander, Rt. Hon. A. V. (Hillsbro')
Hall, F. (York, W. R., Normanton)
Marley, J.


Alpass, J. H.
Hall, G. K. (Merthyr Tydvil)
Mathers, George


Ammon, Charles George
Hall, J. H. (Whitechapel)
Maxton, James


Arnott, John
Hall, Capt. W. G. (Portsmouth, C.)
Messer, Fred


Attlee, Clement Richard
Hamilton, Mary Agnes (Blackburn)
Middleton, G.


Ayles, Walter
Hardie, David (Rutherglen)
Mills, J. E.


Baker, John (Wolverhampton, Bilston)
Hardie, G. D. (Springburn)
Montague, Frederick


Barnes, Alfred John
Hastings, Dr. Somerville
Morgan, Dr. H. B.


Barr, James
Henderson, Rt. Hon. A. (Burnley)
Morley, Ralph


Batey, Joseph
Henderson, Arthur, Junr. (Cardiff, S.)
Morrison, Robert C. (Tottenham, N.)


Benson, G.
Henderson, Joseph (Ardwick)
Mort, D. L.


Bowerman, Rt. Hon. Charles W.
Henderson, Thomas (Glasgow)
Muggeridge, H. T.


Bromfield, William
Henderson, W. W. (Middx., Enfield)
Murnin, Hugh


Bromley, J.
Hirst, G. H. (York W. R. Wentworth)
Naylor, T. E.


Brooke, W.
Hirst, W. (Bradford, South)
Noel Baker, P. J.


Brothers, M.
Hoffman, P. C.
Noel-Buxton, Baroness (Norfolk, N.)


Brown, Rt. Hon. J. (South Ayrshire)
Hopkin, Daniel
Oldfield, J. R.


Buchanan, G.
Horrabin, J. F.
Oliver, George Harold (Ilkeston)


Burgess, F. G.
Jenkins, Sir William
Palin, John Henry


Buxton, C. R. (Yorks. W. R. Elland)
John, William (Rhondda, West)
Paling, Wilfrid


Cape, Thomas
Jones, Morgan (Caerphilly)
Palmer, E. T.


Carter, w. (St. Pancras, S. W.)
Jowett, Rt. Hon. F. W.
Parkinson, John Allen (Wigan)


Charleton, H. C.
Kelly, W. T.
Perry, S. F.


Clarke, J. S.
Kennedy, Rt. Hon. Thomas
Pethick-Lawrence, F. W.


Cluse, W. S.
Kenworthy, Lt.-Com. Hon. Joseph M.
Phillips, Dr. Marion


Cocks, Frederick Seymour
Kinley, J.
Pole, Major D. G.


Compton, Joseph
Kirkwood, D.
Potte, John S.


Cove, William G.
Lansbury, Rt. Hon. George
Price, M. P.


Cripps, Sir Stafford
Lathan, G. (Sheffield, Park)
Quibell, D. J. K.


Daggar, George
Law, Albert (Bolton)
Rathbone, Eleanor


Dallas, George
Law, A. (Rosendale)
Raynes, W. R.


Dalton, Hugh
Lawrence, Susan
Richards, R.


Davies, D. L. (Pontypridd)
Lawrie, Hugh Hartley (Stalybridge)
Richardson, R. (Houghton-le-Spring)


Davies, Rhys John (Westhoughton)
Lawson, John James
Riley, Ben (Dewsbury)


Ede, James Chuter
Leach, W.
Ritson, J.


Edmunds, J. E.
Lee, Frank (Derby, N. E.)
Romeril, H. G.


Edwards, C. (Monmouth, Bedwellty)
Lee, Jennie (Lanark, Northern)
Samuel, H. Walter (Swansea, West)


Egan, W. H.
Leonard, W.
Sanders, W. S.


Gardner, B. W. (West Ham, Upton)
Lewis, T. (Southampton)
Sawyer, G. F.


Gardner, J. P. (Hammersmith, N.)
Lloyd, C. Ellis
Scrymgeour, E.


Gibbins, Joseph
Logan, David Gilbert
Scurr, John


Gibson, H. M. (Lanes, Mossley)
Longbottom, A. W.
Sexton, Sir James


Gill, T. H.
McElwee, A.
Shepherd, Arthur Lewis


Gossling, A. G.
McEntee, V. L.
Shield, George William


Gould, F.
McKinlay, A.
Shillaker, J. F.


Graham, D. M. (Lanark, Hamilton)
MacLaren, Andrew
Shinwell, E.


Graham, Rt. Hon. Wm. (Edin., Cent.)
Maclean, Neil (Glasgow, Govan)
Short, Alfred (Wednesbury)


Greenwood, Rt. Hon. A. (Colne).
MacNeill-Weir, L.
Simmons, C. J.


Grenfell, D. R. (Glamorgan)
Manning E. L.
Sinkinson, George


Griffiths, T. (Monmouth, Pontypool)
Mansfield, W.
Sitch, Charles H.




Smith, Ben (Bermondsey, Rotherhithe)
Tinker, John Joseph
Welsh, James C. (Coatbridge)


Smith, Frank (Nuneaton)
Tout, W. J.
Whiteley, Wilfrid (Birm., Ladywood)


Snowden, Thomas (Accrington)
Townend, A. E.
Wilkinson, Ellen C.


Stamford, Thomas W.
Turner, Sir Ben
Williams, David (Swansea, East)


Stephen, Campbell
Vaughan, David
Williams, E. J. (Ogmore)


Strachey, E. J. St. Loe
Viant, S. P.
Wilson, C. H. (Sheffield, Attercliffe)


Strauss, G. R.
Walkden, A. G.
Wilson, J. (Oldham)


Sullivan, J.
Walker, J.
Wilson, R. J. (Jarrow)


Sutton, J. E.
Watson, W. M. (Dunfermline)
Wise, E. F.


Thorns, W. (West Ham, Plaistow)
Watts-Morgan, Lt.-Col. D. (Rhondda)



Thurtle, Ernest
Wellock, Wilfred
TELLERS FOR THE NOES


Tillett, Ben
Welsh, James (Paisley)
Mr. Hayes and Mr. William Whiteley.


Question, "That the Clause stand part of the Bill," put, and agreed to.

Clause 9 (Notice of variation of assessment, etc.) ordered to stand part of the Bill.

CLAUSE 10.—(Income Tax in connection with conversion of Government securities.)

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Mr. PETHICK-LAWRENCE: We ought not to allow this Clause to go by without some explanation from the Financial Secretary in regard to it. This is a glorious example of a long sentence making 20 lines of the Bill with nothing beyond a comma. I have made several attempts to read it through and understand it. The first time I understood 10 lines of it and the second time 15 lines, but every time I got to the 16th line I forgot what was in the first few lines. Perhaps the hon. Gentleman can give us an explanation in sentences of five lines each and then we shall be able to judge whether we could allow the Clause to go through, or put up the strenuous opposition which we have put up against some of the other Clauses.

Major ELLIOT: I am more than complimented by the trust placed in me by my predecessor, and will do my utmost to justify it, all the more as I had to make several attempts at understanding this Clause before being sure I could grasp it, because there is some prejudice among draftsmen against points of punctuation. I understand they were invented long after draftsmanship became an art, and that the Parliamentary draftsmen have little desire to incorporate them. The point is simple. The object of the Clause is to relieve persons who are dealing in securities from liability for Income Tax in respect of profits made out of the realisation of securities when they are only making these profits by the acceptance of British securities under a conversion scheme. It
is to facilitate a conversion scheme and to bring in a procedure under which these companies are not immediately liable to Income Tax if they accept these new securities. That is the object of the Clause. The provisions of the Clause are that, in a conversion of securities, in connection with which the Treasury direct that the provisions of this Clause should have effect, unless the taxpayer gives notice in writing to the inspector of taxes, the acceptance of the substituted securities will not be treated for Income Tax purposes as a realisation.
That, I understand, is the gist of the matter. It would, perhaps, be well if I did not go further into it, because, first of all, I might confuse the Committee, and, secondly, I might confuse myself. I have gone into this tooth and claw, and those are two good points which I have got hold of, and I intend to hang on to them. Anything further I am willing to discuss round a table with legal gentlemen, with accountants or with anybody else whom the companies desire to put up, but on so highly technical a matter I do not think I could usefully explain things further. The technicalities need to be expounded round a table, when the exact minutiae of the laws concerned could be gone into not merely with myself but with the technical experts on whose judgment and whose criticism I should have to rely.

Mr. REID: I should like to warn the Financial Secretary of one or two points which may be raised. Section 60 of the Finance Act of 1916 applies only to securities issued during the War or within six months after the termination of the War. I am not an expert on the subject, but I would like to know what securities issued under those conditions still exist and have conversion rights attached to them. So far as I know, all the conversion rights of securities to which that Act refers are exhausted.
Another point is whether this Clause has any bearing upon matters which are under appeal. There is the precedent of the case which was recently before the Courts. Can we take it that there is nothing in this Clause prejudicing any appeal now pending?

Mr. HOFFMAN: This is most extraordinary procedure. I am quite sure that if we were in normal times, and the hon. and gallant Member who is at present Financial Secretary of the Treasury were sitting on these benches, he would try to keep the proceedings going all night, not merely in order to get two points and hold on to them firmly but in order to get at the whole sum and substance of the Clause. On many occasions he has twitted me because of some gentle interruptions while be has been talking irrelevancies about some Measure before the House, but now he comes here and asks us, humorously, it is true, to give him grace because he does not understand the Clause himself. He has got hold of two points. The Committee as a whole ought to be satisfied about this Clause, and I am not. I want to know, among all the ramshackle things done by that ramshackle crew on the other side of the House, what this ramshackle Clause really does mean. Is this some further jiggery-pokery on behalf of the Stock Exchange and financial interests in the city? It may be a ramp. I am sure that some hon. Members opposite will get the cramp within the next three weeks if they appeal to the country. Is this a prescription which has been given by the doctor on behalf of the city? Is this part of the doctor's mandate? [Interruption.] Perhaps the hon. and learned Member for South Nottingham (Mr. Holford Knight) can explain? We are entitled to know something more than that there are at least two points on which the Financial Secretary himself can firmly lay his hands. I am not satisfied, and I sincerely hope that either the Financial Secretary or some other hon. Member will give us an explanation of this Clause.

Mr. T. GRIFFITHS: I wish to ask one question. Can this be made the subject of an Order in Council? If not, why not? The Financial Secretary has failed to explain the reason for this Clause, and I think he ought to call in the Law Officers of the Crown. Why should it be
left to an ordinary layman to try to explain intricate matters like this? [Interruption.] I see the hon. and learned Member for South Nottingham (Mr. Holford Knight). Why do not you get up?

The CHAIRMAN: Is the hon. Member inviting me to get up?

Mr. GRIFFITHS: I suggest that the explanation of the Financial Secretary is not sufficient. This is a very important matter. He is dealing now with those who have securities. How will this affect the ordinary investor when conversion takes place? Let us get the. Law Officers of the Crown here. The matter ought not to be passed over in this way. I have known the Financial Secretary to keep us here to two or three o'clock in the morning asking us to explain little things that are as plain as daylight to the ordinary man in the street. Now even we cannot understand this and the Financial Secretary states that he himself cannot. He has admitted that he has understood only eight lines of it. An hon. Friend of mine has just pointed out that he got through 15 lines of it and when he came to the 16th line he had to begin all over again because he had not understood what the first 15 lines were about.

Major ELLIOT: I think the difficulty would be greater if we got skilled gentlemen, learned in the law, to explain this matter which, after all, is one which we desire to understand ourselves. We are largely laymen in this Committee, and if we cannot grasp it obviously it will prove to be a fertile field for the gentlemen of the robe. I have been able to make something of it here, and now I will try again. In the first place two specific questions were asked by the hon. Member for Down (Mr. Reid). He asked, first of all, to what securities this Clause would apply since Section So of the Finance Act of 1916 did not apply any longer. That Section 60 was extended or amended by Section 47 of the Finance Act, 1921, and it now extends to a much wider range of securities. His second point was as to what reference this Clause had to any case at present under appeal. He is dealing, I think, with the judgment given by Mr. Justice Rowlatt on the 8th June last, when he decided in favour of the Crown. It is true that the
Westminster Bank has given notice of appeal to the Court of Appeal, but the Treasury fear that whatever happens as a result of that appeal, the position of future conversion operations might be prejudiced. They want to make it quite clear that dealers in these securities shall not be affected by this question of the profits arising solely by accepting British Government securities in pursuance of a future conversion scheme. Therefore although the judgment has been given in favour of the Government they are not anxious that this judgment should stand in the way in the case of future conversions. I hope I have now answered the questions put to me to the satisfaction of hon. Members.

Mr. REID: I think the answer given by the hon. and gallant Member is satisfactory. The only point I was anxious about was whether any of these people concerned would be prejudiced but presumably some arrangement will be come to.

Major ELLIOT: The bank has appealed against the decision, but from the Treasury point of view the position remains unaltered, and what I have stated would apply to any future conversions. I will now deal with the point put by the hon. Member for Central Sheffield (Mr. Hoffman) and other hon. Members opposite, who have stated that, in their opinion, I have not made the position sufficiently clear. I think in all these cases the position can be explained in non-technical language, and I will endeavour to do so. First of all, this Clause is concerned with enterprises whose business consists in dealing in securities such as insurance companies and finance houses and so on. As in the case of the Rowlatt judgment dealing with the acceptance of securities in exchange for national war bonds, it was held that there was a realisation and that they would be liable for Income Tax. The point is that the question of profit or loss for Income Tax purposes will not in future arise until the actual realisation of the substituted securities, and it will then be determined by reference to the cost of the original security, and taking into account the amount of any cash bonus received in connection with the conversion. I think the Committee is
quite right in insisting upon this matter being made clear, and I am desirous of making it as clear as possible. The difficulty which arises can best be shown in dealing with the actual case of the Westminster Bank and the Crown which was considered by Mr. Justice Rowlatt on 8th June last. That dealt with the acceptance of securities in exchange for national war bonds, in which case the Income Tax became payable. Obviously, during those operations companies might find themselves particularly struck by these matters, and it was agreed not to make the liability chargeable upon a hypothetical realisation but on the actual transaction. I hope I have got the Committee with me so far.

Mr. PETHICK-LAWRENCE: I would like the Financial Secretary to the Treasury to give me two assurances. In the first place, I should like an assurance that we are not losing any Income Tax by this transaction. In the second place, can the hon. and gallant Gentleman tell us that, if Section 60 of the Finance Act of 1916 directly applies in these cases, it applies as amended by the Finance Act of 1921. Perhaps if the hon. and gallant Gentleman cannot give me an answer now he will undertake to consider these points before the Report stage. On previous occasions, it has been thought convenient in the actual text of a Bill where a previous Act has been cited to insert the words "as amended."

Captain CROOKSHANK: Is this Clause the draftsman's contribution to the national emergency and does it represent, in accordance with the general practice, a 10 per cent. cut in lucidity?

Captain RONALD HENDERSON: What would happen in the case of securities which are transferred with a cum dividend right?

Major ELLIOT: The hon. Member for West Leicester (Mr. Pethick-Lawrence) has asked whether I can give an assurance that this provision will involve no loss of revenue, but is merely a technical rearrangement. I can give that assurance. In the second place, the hon. Gentleman asked me to consider, between now and the Report stage, whether I would insert the words:
Section 60 of the Finance Act, 1916, as modified by Section 47 of the Finance Act, 1921.
I shall certainly be glad to look into that point and to take any steps which would elucidate the matter. With regard to the observation of my hon. and gallant Friend the Member for Gains-borough (Captain Crookshank), as to whether there has not been a 10 per cent. cut in lucidity, I would say that I think there is a 10 per cent, cut in punctuation. The difficulty in all these cases, as we know from our own professional experience in one form Or another, is that very often an attempt to clarify a provision by putting it into popular language opens the door to all sorts of confusion when the technical gentlemen apply their minds to it. I remember that, when the late Lord Balfour was bringing in his Education Bill, he was not satisfied with certain of the draftsman's efforts, and he drafted several of the Clauses himself and sent them back to the Parliamentary draftsman. He received in reply a note from the Parliamentary draftsman saying:
This appears to be an excellent popular pamphlet upon the objects of the Bill.
I do not wish to go further into the details of this Clause, because. I think I have made clear to the Committee, as I understand it, the main object of the Clause, namely, that dealers should not find themselves immediately involved in liabilities for Income Tax—the question of dividends and so on is merely one factor—but that the whole question of realisation should be postponed to a point where there is a real and not a hypothetical realisation.

CLAUSE 11.—(Right of Stockholders to continue holdings in five per cent. War Loan; requirement of application for cash repayments; etc.)

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again," put, and agreed to.—[Sir B. Byres Monsell.]

Committee report Progress; to sit again To-morrow.

The remaining Government Orders were read, and postponed.

BRITISH TREASURY CREDITS (BANK OF ENGLAND).

Whereupon Mr. DEPUTY-SPEAKER, pursuant to the Order of the House of the 9th September, proposed the Question, "That this House do now adjourn."

Mr. KELLY: On a point of Order. May I ask if the other Orders are not to be read out to-night? Surely, in accordance with the Standing Orders of the House, the other Orders should be read out, seeing that it is not yet Eleven o'clock?

Mr. DEPUTY-SPEAKER (Sir Dennis Herbert): Under the Resolution of the House, those Orders are not read, and it is the duty of the occupant of the Chair immediately to propose the Question, "That this House do now adjourn."

10.0 p.m.

Mr. WISE: I rise to call the attention of the House to certain transactions of very great importance and of a rather technical nature, in regard to which it is clearly desirable that the House and the country should have a great deal more information than has already been vouchsafed by the Government. The House will recall that, at about the end of July, it became clear that the position of this country in regard to gold was becoming difficult. During the last fortnight of July, owing to a run on London, mainly from Paris, very considerably quantities of gold were leaving the Bank of England, and that panic began which has played so great a part in our discussions since that time. At about the end of July a distinguished member of the Court of the Bank of England, accompanied by various Bank of England officials, went to Paris and negotiated credits on behalf of the Bank of England, for the purpose of stopping, so far as possible, the loss of gold. We have not been given very full details of those transactions, but, from the financial Press in London and Paris, it appears that half the amount was subscribed by Paris in francs and half by New York in dollars. The whole transaction was a purely Bank of England transaction; at that stage there was no real talk and no public expectation of our going off the Gold Standard, and in the "Economist" and in the Press generally there was great mutual congratulation at the manner in which the three central banks of this country,
France and the United States had cooperated in the common financial interest of the banking system of the world.
The rate charged, as far as I can gather, for these facilities, was 3⅜ per cent. They were of the nature of re-discount facilities, and were repayable within three months. That was at the beginning of August, and at that stage neither the Treasury nor the Government appeared to have come into the transaction in any way whatever. About two weeks later, it rapidly appeared that these credits would be insufficient to save the pound sterling. They were evidently being utilised rapidly for the transfer of sterling balances belonging to foreigners or to British subjects from London to Paris and New York, and were rapidly running out; and it was evident, of course, that, if they ran out, a dangerous call on gold would immediately eventuate. In these circumstances, representatives of the Bank of England and the City met the Labour Government of that time, and pressed upon them the necessity of drastic and immediate action in the way of more and larger credits, in order to preserve the stability of the pound sterling on gold, and we have heard a great deal from both Front Benches as to the events of the next few days. There was a tremendous pressure from the City on the Government, and a tremendous pressure, apparently, on his colleagues by the Chancellor of the Exchequer, in order to procure, as rapidly as possible, credits, not this time for the Bank of England—because I presume, since the Government intervened, that the power of the Bank of England to get credits on its own credit had ceased—there was great pressure on the Government to come in and rescue the Bank of England, and themselves procure the credits from New York and Paris which it was alleged were, and, as events proved in the circumstances, were necessary.
It was at that time that the conditions were made, apparently by the New York banks as interpreted by the Bank of England representatives, that drastic steps should be taken in regard to the Budget and in regard to the method of balancing the Budget such as are now embodied in the National Economy Bill which we have been discussing. According to the statement of the Prime Minis-
ter in reply to a question some week or two ago, those credits were conditional on measures being taken to deal with unemployment insurance benefits and with the Unemployment Insurance Fund on lines that we all know about in the House now. In fact, as far as one can tell, the New York banks definitely made certain very important and far-reaching political stipulations as a condition of their financial help. They did not content themselves with merely political stipulations. They proceeded to drive a very hard and profitable bargain.
According to a reply made to me in the House of Commons on 17th September, they insisted that we should pay a minimum of 4¼ per cent. per annum for the actual accommodation and an overriding commission for, I understand, underwriting and other costs of 1½ per cent., with the further condition that, if the Federal Reserve Bank discount rate exceeded 6 per cent., the rate should follow the Federal Reserve Bank. The minimum was 4½ per cent., but the rate was to be at all times 2 per cent, above the Federal Reserve rate and, if the Federal Reserve rate increased to 6 per cent, it was to follow that rate, making the cost to us for that accommodation, assuming that it was available for the whole 12 months, which it was not, a minimum of 5¾ per cent. and a maximum of somewhere in the neighbourhood of 7 or 8 per cent. I recite these terms to the House because they were very remarkable terms. This is an economy Government come in, as we understood, to apply what they call business methods to the national finances and this was their first transaction, setting the tone, no doubt, which would be followed by others, and that rate of somewhere in the neighbourhood of 6 or 7 per cent. is to be contrasted not with the price of money accommodation in London, Berlin or anywhere else, but with the rate prevailing in New York and in Paris.

Captain HENDERSON: Will the hon. Member explain how he arrives at a minimum rate of 4½ per cent. and estimates an average rate for the 12 months, if necessary, of 5½ per cent.?

Mr. WISE: There was a minimum rate of 4¼ per cent. on the money for so long a period and there was a commission of 1½ per cent, on the full amount of the
credit whether borrowed or not. We should have had to pay several hundreds of thousands of pounds even if we had not borrowed a penny. The money might not have been borrowed for as long as 12 months and, in that case, the rate would have been higher. Assuming that it was actually borrowed for 12 months, which is a favourable case for the Government, we should have had to pay 1½ plus 4¼, making 5¾ per cent. If you take the higher figure, you get a figure up to 7¼d per cent.

Captain HENDERSON: At what price was it issued?

Mr. WISE: To the best of my knowledge, at par. They were bills, and there is no question of a discount on bills. If there was, it would probably be again against the Government. They were certainly not issued at a premium. I understand from the Financial Secretary to the Treasury that those figures are accurate. At that time the bank discount rate on three months bills—these credits were in the form of three months renewable bills—was 1 per cent. The rate that the United States Government was paying for bills on 12 months' tenure was 2 per cent. The rate for long-term United States Government bills was 3 per cent. The corresponding rate to the transaction that we were engaged in was somewhere between 1 and 2 per cent. I ask the Financial Secretary to the Treasury why it was, therefore, necessary for the British Government to pay between 5¾ and 7 per cent.? The actual rate on ordinary commercial three months bills was about 2 per cent. per annum. It may be that we should have to pay, in the special circumstances, apart from the political price we were required to pay, as expensive and humiliating to the prestige and business interests of the country as anything that has happened in our generation, a little more than the United States rate borrowing in its own market, but I can conceive no financial justification in the circumstances why this country, borrowing in New York, should pay about three times the current rate for money.
In Paris the situation was somewhat different, but there are some interesting comments in the "Statist" on the way in which the transaction was carried through. For some months Paris had been absorbing gold to an extent which
it was quite impossible for it to absorb immediately into industry. In 12 months Paris withdrew in gold about £100,000,000 and, apart from some small increase in the circulation, £75,000,000 of that £100,000,000 was to be found in private deposits in the Bank of France. It was deposits held there by French banks, and non-interest bearing. The Bank of France does not pay interest on its de posits. The French banks had withdrawn their balances from London in the form of gold and deposited it in the Bank of France, because they could not find any method of using it in France. France was suffering from gold indigestion.

Captain HENDERSON: The hon. Member says the gold was withdrawn by French nationals. There was no bankers ramp.

Mr. WISE: The hon. and gallant Gentleman must distinguish between the Bank of France and the banks of France. It was withdrawn largely, not by the Banque de France, but by the banques Francaises and by French individuals. Actually, anyhow, a return of the Bank of France shows that three-quarters of the whole of the withdrawals of gold was lying on sterile deposit, earning no interest at all, in the Banque de France. The French banks were paying something to their nationals for deposit. The deposit rate in France at that moment was between ¼and ½ per cent. So you have a financial situation in France in which the French banks were paying¼ to½per cent. for the deposits of their nationals. They were holding their money, being unable to use most of it, in the Bank of France, and getting no interest upon it.
I apologise for dealing with very technical matters, but it is essential to an understanding of this problem. If you look at the cash ratio—I quote one of the leading French banks—you will find that it completely confirms my analysis of the situation, because the cash ratio which had been, at the normal, about 9 per cent., which is the sort of rate applicable here, increased in that period to somewhere over 20 per cent. In other words, Paris was full of idle money, earning no interest and brought back on account of a panic or for political reasons by French nationals and French banks, and just awaiting an opportunity for reinvestment or re-use in some way. At
that moment His Majesty's Government go into the Paris market and pay a price which was practically the same as the American price—if not quite the same—of 4¼ per cent. per annum interest, with a commission rate going to the French banks, which themselves directly provided the money, of 1¼ per cent. A rate of 5¾ per cent. was paid to the French banks for money which at that moment was entirely unusable in Paris and was yielding no interest to French nationals, who at the most were getting from ¼ to ½ per cent. for their money. The rate for money borrowed was very little more than ¼to 2 per cent.
I should like to know in regard to both those transactions by whose advice the Treasury was guided? Who told them that it was necessary to pay these extravagant rates? Who let them in for these extraordinary and expensive transactions? I should like to know also what exactly were the pacts made with the French and the American banks? In the government of this country, if a contract is made by the Post Office for mail bags or for uniforms or for boots, we are entitled to have details of it. In regard to many departments, copies of contracts are furnished to this House. The firms with whom the contract is made, the articles and all the rest of it are published periodically by the Contracts Department of the Army and Navy. But why are we forbidden to know who were the fortunate banks in Paris and New York who handled this extremely profitable transaction? Why are we not told what the other conditions were? It may be that there were circumstances, conditions and stipulations of very great importance, if we are to understand rightly what, on the face of them, are almost inexplicable financial or political transactions. Why are they hidden from a House which is entitled to know?
I ask the Financial Secretary to give an explanation which will be reasonable and not based on the precedent of the situation. I quite understand that it has not been customary to suppose the ordinary voter in this country is interested in these high and mighty matters of finance. I quite understand that the relations between the Bank of England and the Treasury, and between the Treasury and the City have always been regarded as something of a peculiar and secret nature which must not be told, but
I think that the time has passed when the House should be put off by that sort of reason. I think the House and the country are beginning to realise that these mysterious transactions are of very great importance not merely to the Treasury but to the whole structure of finance and industry in this country. So much for the transactions.
Let me point out to the House that, despite the high rate paid, these transactions were entirely futile. They entirely failed to achieve the object for which they had been entered upon. Their purpose was to save the pound. They were not successful in saving the pound. Indeed, the only purpose which, in fact, was fulfilled by those credits was in facilitating the transfer of sterling to francs and to dollars at a high rate. Whether these higher rates went to foreigners who had their balances here or possibly to a very considerable number of English citizens who desired to get their money abroad, there is no justification for these amounts being paid by the taxpayer. The whole transaction is so unsatisfactory from the financial point of view and so disastrous from the political point of view that the Government found themselves coerced, so we were told by Members of the last Cabinet, into embarking upon a policy which is entirely disastrous to the whole country, and we are entitled to know all about it.
I want to deal with another point, a legal point, affecting the relations between the Treasury and the Bank of England. Those relations have always been rather uncertain and mysterious. We have been constantly told in this House that we cannot put questions, because the Bank of England is an independent unit and not under the control of the Treasury. It appears, however, that when the Bank of England is in a difficulty the Treasury rushes, at the expense of the taxpayer, to its rescue. That is exactly what happened in this case. But it is not within the power of the Treasury to charge the credit of this country, however great the emergency, beyond the statutory and legal power. The Treasury has no arbitrary right, apart from Statute, to throw public money recklessly about in transactions of this kind or of any kind, whatever the emergency, unless either before or after-
wards they come to this House for an indemnity. The powers and functions of the Bank of England in relation to the Treasury are set out in the Bank Charter Act, 1844, and in a later Act passed in 1928, when the Treasury notes were handed over to the Bank of England for management.
In reply to various questions that have been put from this side of the House, the Treasury said that the taking over by the Government of the responsibility of those two series of transactions, the first one conducted entirely by the Bank of England and the second one conducted by the Treasury, was covered by a Clause in the second Act. Let me deal with that point. The Bank Charter Act, which determines the broad relations and duties of the Bank of England, requires the bank, in dicharging its public function of running the currency, to keep the accounts relating to the currency in what is known as the Issue Department., and lays down very strict and clear conditions as to the kind of transactions which may be entered into by the Issue Department of the Bank of England. It says very definitely that the Issue Department
May issue banknotes and promissory notes, payable on demand.
There is no provision for the Issue Department undertaking rediscount operations or issuing bills of three months' tenor or, so far as I can see, anything remotely resembling the sort of transactions into which the Government have entered. The later Act of 1928 merely requires that the profits from the Issue Department, less any losses, presumably, should come back to the Treasury.
These transactions are very expensive in themselves and they are likely to be much more expensive, because we operated in francs and dollars when the pound was on a parity with gold, and we have to repay back as far as this transaction is concerned in depreciated sterling, and as far as other transactions are concerned probably in depreciated sterling also. At the present sterling rate there has been a loss of between £30,000,000 and £40,000,000, at least £30,000,000, on these transactions, which will have to come out of the taxpayer in the next Budget or be met by an addition to the National Debt. I want
to know under what statutory or legal authority these transactions, particularly the first, are to be carried by the taxpayer? Take the first transaction. It was entered into entirely by the Bank of England, and, so far as I know, until the sterling went and a heavy loss appeared likely to result from the transaction, there was no suggestion that it was a transaction in which the profits and losses should be borne by the Treasury.
If it was a transaction to be carried out by the Issue Department of the Bank of England will the Financial Secretary tell me why there is no trace, as far as I can see, in the weekly returns published under statutory requirement by the Issue Department in which this first transaction can be traced. If the Issue Department in the early weeks of August had entered into a transaction involving a liability, contingent or actual, of anything up to £50,000,000 sterling, it should appear in the weekly return. I have examined the weekly returns very carefully and there is not the slightest trace of that transaction anywhere. I suggest that there may be this interpretation of this transaction; that the Bank of England never thought it was a proper charge to put on the taxpayer until it was clear that there was going to be a serious loss, until the exchange went, and then they looked around for someone to "carry the baby" and they found a willing Government glad to economise at the expense of the unemployed and equally willing to help their friends in the City out of what was a very awkward position. That seems to be the interpretation. if it is wrong, the Treasury have to thank their unwillingness to give precise details and accurate information to the House for any misundertanding there may be.
The same kind of considerations apply to the latter transaction, the bigger one, both of them fruitless and unprofitable and both of them extremely expensive and likely to result in a serious loss to the country. The Financial Secretary will probably say that it does not matter now. I think the Chancellor of the Exchequer said that it does not matter, because we can export gold which is already in the Bank of England and make a profit which will rub out this loss. The gold was there in any case,
and we could have made a profit on that gold if these transactions had never been entered into. The gold is held as a reserve not only for balancing losses of this kind made by the Bank, but as a reserve for internal purposes as well as for general exchange purposes. As far as I can see, these transactions are not the general banking transactions which the Currency Act definitely allots to the Issue Department, which is a sort of Treasury Department of the Bank of England. There was no idea of putting the first transaction on to the back of the taxpayer until it was clear that it was going to land the Bank in a very heavy loss.
I submit that the House is entitled, the taxpayers are entitled to very much more satisfying and exact information as to the legal and other reasons, before we separate for the Recess. I would particularly like to know—I put a question to the Financial Secretary on the subject this afternoon—whether the Comptroller and Auditor-General or the Law Officers have advised that this is a satisfactory legal procedure. I do not know whether there are any precedents for it. I do not think there are. We have never had to go into such a transaction as this before; never before in the history of this country has any Government submitted to such humiliating political terms. But to discuss that is not my purpose to-night. I do not want to get off the financial point; I am dealing primarily with the financial point.
One word on the general relations between the Bank and the Treasury. It is perfectly plain that it is an absolutely indefensible anomaly to have the financial affairs of this country that matter, the control of the currency, the exchange, the balance of trade, and all the rest of it, under the control of a more or less irresponsible private corporation whose relations to the Treasury no one exactly knows, whose responsibility and that of the Treasury are quite inadequately defined, which sometimes is operating on its own account—because most of these transactions are designed to protect and assist the exchange, as this transaction is alleged to have done here—and sometimes on account of the taxpayers. It is equally plain that in transactions of this sort the House is entitled to have full and
complete papers showing exactly the liabilities, the responsibilities, and the reasons for those liabilities and responsibilities into which the country has entered.

Major ELLIOT: The hon. Member for East Leicester (Mr. Wise) has addressed the House at some length on this topic. Of that I make no complaint whatever, but I do make some complaint of the fact that he seems to think there is something extraordinarily mysterious about this transaction. The transaction is perfectly plain and straightforward. There is no mystery about it whatever. The relationship which the hon. Gentleman wants to have explained is set out in great detail in the Sections of an Act of Parliament. The hypotheses upon which the whole of his argument has proceeded, that some irresponsible transactions were entered into by the Bank of England, about which the Government did not know anything whatever until it was called in to save the Bank from loss on a private banking transaction—those were the arguments of the hon. Member—

Mr. WISE: I did not say that the Government were not aware of the transactions. What I said was that this first transaction, the £50,000,000, was a transaction made by the directors and by the officials of the Bank of England. I said there was no evidence at all that the Bank or the Treasury decided to charge the lot to the Issue Department until it appeared that the pound had gone off parity with gold and that there would be a considerable loss on the transaction.

Major ELLIOT: Surely that is exactly what I have been saying. The hon. Member said that the Bank of England had entered into transactions either with the cognisance of the Government or without it. Let me take the two hypotheses. If it was with the cognisance of the Government the whole of his argument falls to the ground. If the Bank was acting with the cognisance of the Government it was acting as expert financial manager on behalf of the State. It it was acting without cognisance of the Government, then it was certainly acting entirely outside its power. Let me take that issue and let me reassure
the House, and the country through the House, that there was no question whatever of the Bank acting without the cognisance of the Government. [Interruption.] I am dealing with a point, which has certainly been made outside, and which has certainly made an impression upon the minds of many hon. Members—the point that in some way or other the Bank entered into a transaction on the principle of heads I win, tails you lose." Let us dispose of that issue first because that is the gravamen of the whole charge. Here is the provision in the Currency and Bank Notes Act, 1928:
The Bank shall at such times and in such manner as may be agreed between the Treasury and the Bank pay to the Treasury an amount equal to the profits arising in respect of each year in the Issue Department.
That is the first point. If the Bank is to pay over the profits to the Government, it is surely clear that, similarly, the Government have to allow to the Bank the amount of any losses. That is an arrangement of a kind of which we shall have many more in the future in which a technical organisation is undertaking a liability on behalf of the State. It is the sort of problem which the hon. Member himself has examined on many occasions and to which hon. and right hon. Gentlemen opposite have frequently had to bend their minds—the relationship of this House of laymen with high technical problems and organisations. A technique has to be worked out in each particular ease, and the technique in this instance is the Bank of England acting as expert manager on behalf of the State.
We are all agreed that in the matter of the Issue Department the Bank of England acts as an expert manager, and that transactions of that department are transactions of the State and not trans- actions of the Bank. The hon. Member says that this was not a transaction of the Issue Department but it certainly was. He also asked what position was taken by the Comptroller and Auditor General. Certainly, the authority of the Comptroller and Auditor-General was not sought beforehand, and it would be quite wrong if it were, but the Comptroller and Auditor-General has been kept fully informed of all the material facts and has raised no question whatever. The first thing to get hold of is that the first transaction of the £50,000,000
was a transaction of the State and that the second transaction, the £80,000,000 was a transaction of the State. They were transactions in which the State would certainly have claimed the profits had there been any, and in which the State or in other words the whole community, is subject and rightly subject to the losses. These were transactions on behalf of the community as a whole. Every, coin, every note in the private pocket of every citizen is affected by these transactions. The hon. Member himself would be the first to object if transactions of that kind were carried out irresponsibly and privately by some private corporation.
I have now exposed the first point raised by him—was it or was it not a transaction of which the Government was fully cognisant and responsible from beginning to end? It was a transaction of which both the previous Government and the present Government have been fully cognisant from beginning to end, and therefore the responsibility is a State responsibility. His second point was that this was a foolish transaction. [An HON. MEMBER: "Why did not the transaction appear?"] I will deal with that because it is a point of some importance, It did not appear for this reason, that obviously when a run was going on it was most undesirable that these figures should be published, and information given for the benefit of the "bear raid," and those who were carrying out such a raid as certain persons were. No more foolish transaction—

Mr. WISE: Do I understand the Financial Secretary to say that the return made by time Bank of England was a false return?

Major ELLIOT: Certainly it was not a false return. The fact is that the gross transaction is given in our return, but the details are not given. There is nothing false about that. The details will be returned in full.

Mr. WISE: I have here a return, for the 26th September, of the Bank of England, and I have examined the files of the "Economist," and if the Issue Department had undertaken liabilities in respect of bills of exchange, or rediscount, or Treasury bills in New York and Paris, will the hon. and gallant Gentleman explain to me where it appears in any of these returns, in the
total, which hardly varies, or in the actual details?

Major ELLIOT: Does the hon. Member suggest that the raising of this money, the purchase of these bills, the issue of this loan, was not perfectly well known, not merely in every technical—[An HON. MEMBER "Answer the question!"]—I am answering the question, and I say that the gross transactions were not merely known in every technical and financial centre, but were matters of common knowledge in every newspaper and in every circle, public and private, in this country. [Interruption.] I have explained it to the hon. Member, but I will explain it again and say that the exact progress of the run is the one thing in the world which would have been of advantage, and enormous, immediate, monetary advantage, to speculators; and therefore the details of those transactions were not given from day to day or week to week. I think it will be clear to hon. Members in all parts of the House, and even to the hon. Member for East Leicester himself, that nothing more calamitous could have been done during those weeks than to put, in the ordinary returns of our financial transactions, information of that nature.

Mr. WISE: It is a fortnight or three weeks ago since the Chancellor of the Exchequer told us that those credits were exhausted and that we had therefore gone off the pound—perhaps it was a week or a fortnight ago—and returns have appeared since that date. Why are they not in those returns?

Major ELLIOT: Those returns will appear. Information of the gross transactions has been given in full, not merely to the technical Press, but to the country as a whole. The hon. Member has just said that the Chancellor himself informed the House of the exhaustion of these credits. There is no question at all about the first point of the hon. Member. I am obliged to the hon. Member for Wolverhampton, West (Mr. W. J. Brown) for putting up that point as to the question of the actual returns as to the progress of these transactions, and I hope that also has been dealt with to the satisfaction of the House.

Mr. W. J. BROWN: The hon. and gallant Member knows that quite recently
a very eminent City man has been sent to prison for a long term of penal servitude for a transaction based upon precisely the same kind of argument as the hon. and gallant Gentleman is putting up now.

Major ELLIOT: If the hon. Member thinks he has got any case parallel to that, he has got hold of the biggest mare's nest that he has discovered in all his long hunting career. We are really dealing with the matters which the hon. Member for East Leicester has raised, which are of the greatest importance, and it. is important that we should not be diverted from the line of explanation by observations such as that of the hon. Member for West Wolverhampton. They are technical matters, and I want to disentangle the threads one by one. The first is: Was this a private or a public transaction? The answer is that it was a public transaction, from end to end a transaction of the State. The State, as it was fully cognisant all the way through, is fully responsible for it and for the participation of the State.
The reasons for the participation of the State are set out, not in any secret document, but in the Acts of this House, particularly the Act of 1928, Section 6; in the statement, which was made known, that the £50,000,000 credit had been raised; in the statement, which was published, that the £50,000,000 had been exhausted or practically exhausted; in the statement, which was published, that the £80,000,000 credit had been raised; in the statement, which was published, that the £80,000,000 credit had been exhausted or practically exhausted; in the statement, which has been published, and which was given in this House, of the terms on which these credits were raised in the money markets of New York and Paris. Every step of this transaction and every stage has been fully within the knowledge of this House, except the single point as to the rate at which these credits were being exhausted, and that was not given in detail for the very reason I have given, that it would have defeated the very object we had in view.
Let me come to the further points raised by the hon. Member He said that this was a very bad bargain and that exorbitant terms were charged for the money; and that the terms on which the
money was raised were far above those which were prevailing in the money markets on which it was raised. The hon. Member does not seem to put himself in the position that a borrower always thinks a lender is being most unreasonable. The borrower says, "I have exhausted all my money; give me more." The lender says, "How do I know you will be able to pay it?" "What an unreasonable man you are," says the borrower. The hon. Member for East Leicester says, "What a scandal that we had to pay a sum considerably in excess of the rates which were running in New York and Paris at the time." [An HON. MEMBER: "We are Great Britain?"] Yes, we are Great Britain, but we were the borrowers at the time, and we were engaged in a gigantic transaction far outside any of the transactions which were carried on the money markets of those two countries. Great as the transactions were which were being carried on, we were dealing with the question of confidence.
If the hon. Member for East Leicester thinks that the Treasury went deliberately to New York and Paris out of sheer extravagance, out of a spirit of week-end hilarity, and offered terms which were exorbitantly extravagant, it is no use arguing with him. All I can say is that he must think that the bankers and the Treasury were in a mood which I have never encountered. We went into those markets as a borrower in a hurry, and a borrower in a hurry finds often that the lenders look with great suspicion upon him. I shall not go into the reason for borrowing in a hurry, but they were patent, and had been patent to hon. Members in every part of the House, and to anybody who had watched the financial course of this country. It was certainly not the publication of the May Report or any other single document which brought about the realisation of that. What a shame, the, hon. Member says, that they should charge so much for this money, for their coffers were full of money for which they had no use. Did the hon. Member never try to borrow money from a French peasant, and say, "My good friend, you have got a lot of money for which you have no use; give it to me."

Mr. WISE: I should not be borrowing on the credit of the National Government.

Major ELLIOT: Surely the hon. Member knows he is a 615th part of the credit of the National Government? All I can say is that sometimes I begin to fear that that 615th part is a great deal rockier than the other parts. The suggestion the hon. Member makes is that the French were not getting a high rate of interest or any rate of interest on their money. But that they had that money under lock and key in their vaults, and for that reason they were not very willing to lend it at a low rate of security if they thought that that security was in jeopardy. His statement is the statement of one who is looking at events through rose-coloured spectacles, and who has never gone into the facts of the financial situation. [HON. MEMBERS: They held us up!"] If an hon. Member goes to borrow money or his corporation goes to borrow money, he does not say that the lenders have held him up. He says "I have to look at the terms on which I can raise money. If my credit is good I can raise it easily, but if it is bad I can only raise it with difficulty. If I am in a hurry and have been extravagant, I shall have great difficulty in raising it at all." Local authorities do not go about squealing and saying that the banks have held them up, and there is no reason why this country should squeal and say it has had to pay too high a rate of interest. The hon. Member talked about the French having the money. To get money out of the stockinged foot of the French has always been the financial triumph of anybody who went into the money markets of the world.
I have now dealt with the hon. Member's second point which was that this was an extravagant proposal. It was a vast proposal entered into in haste and in which the borrower had to pay the terms which the lender wanted for his money. There is only one way to keep out of the power of lender and that is not to have to borrow money. There is only one way in which you can avoid borrowing money and that is to balance your Budget and meet your transactions. That is the task which we have been engaged on to-day and will be engaged in to-morrow and the next day and which will be opposed at every stage by hon. Members opposite.
Now I come to the hon. Member's final point which was, should we have under-
taken this at all? He asks why we entered into this great transaction for these vast sums of money and says we might have saved it all. Well, we might have, but should not we have lost something else? Supposing that Britain had made no attempt whatever to meet her engagements, what should we have lost? We should have lost more than the difference between the interest of a few months on this amount of Floating Debt. Are not we committed by our bonds of honour to make every effort to meet our engagements? Is not it necessary to us to do our utmost to make it clear to the world that we are attempting to carry out our obligations? Suppose we are down on this transaction we shall have gained far more from having fought and struggled honourably than anything we shall lose on this debt. Then, how much is it we are supposed to have lost because a portion of the Floating Debt has been contracted in New York and Paris instead of in London? The hon. Member speaks with great indignation of the rate of interest we are paying, an interest of 5¾ per cent., he says. What does he think we are paying to-day in our own country, in the City of London, to carry our Floating Debt? It is £5 12s. 6d. today. Surely the fact that a portion of our Floating Debt is carried now in those two great financial centres is not such an overwhelming transaction as he tries to make out? Finally, he asks about repayment. He says that the gold we have borrowed from France we have to repay in sterling—that we borrowed
against gold and that the debt is appreciating. So is the gold also appreciating. It will be written up.

Mr. WISE rose—

Major ELLIOT: I have given way several times, and we are very close to the moment when the House must rise. The position surely is that if the debt has appreciated so also has the security against which the debt was contracted.

Mr. WISE: Have you in any way hypothecated or given the gold of the Bank of England as security for these credits?

Major ELLIOT: The gold in the Bank of England, the assets of the country, are the security. We have a perfectly good security to meet these debts. It is a security which is, in fact, appreciating. [Interruption.] Surely that deals with the final point of the hon. Member? My concluding remark will be this, that this is a transaction of which the City of London, the Bank of England, the Government and the nation itself have no reason to be ashamed. We have fought up to the end. We have pulled our weight to the last ounce. We threw everything in to maintain our engagements, and on the maintenance of our engagements depend not merely the honour but the trade and existence of this country.

It being one hour after the conclusion of Government business, Mr. SPEAKER adjourned the House, without Question put.

Adjourned at Two Minutes before Eleven o'Clock.